Use the compound interest formula to compute the future value of the investment.
-$1100 at 1% compounded monthly for 12 months

Question

Quizplus · Accepted Answer

The future value of an investment using the compound interest formula is given by $A = P(1 + \frac{r}{n})^{nt}$, where $P$ is the principal amount ($1100), $r$ is the annual interest rate (1% or 0.01), $n$ is the number of times the interest is compounded per year (12), and $t$ is the time the money is invested for in years (1). Plugging in the values: $A = 1100(1 + \frac{0.01}{12})^{12*1} = 1100(1 + \frac{0.01}{12})^{12} = 1100(1.000833333)^{12} ≈ $1111.05$.

Use the Compound Interest Formula to Compute the Future Value