Asked by
Kelli Phelps
on Dec 02, 2024
Verified
Find the future value in two years of $100 that is deposited in an account, which pays 12%, compounded monthly.
A) $160.00
B) $112.70
C) $118.80
D) $125.40
E) $126.97
Compounded Monthly
A method of calculating interest where the interest earned each month is added to the principal, so that the balance doesn't merely grow, it grows at an increasing rate.
Future Value
The future value of a current asset, calculated by applying an estimated growth rate over a specific period.
- Become familiar with the notion of compound interest and its effects on augmenting savings and investment values.
- Gauge the prospective financial worth of single investments and annuities, factoring in a variety of compounding intervals.
Verified Answer
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Learning Objectives
- Become familiar with the notion of compound interest and its effects on augmenting savings and investment values.
- Gauge the prospective financial worth of single investments and annuities, factoring in a variety of compounding intervals.