Suppose that a tenant is interested in renting out a two-bedroom apartment for $1000 a month for the next year.While the tenant requires rent to be paid at the beginning of the month,he will not be depositing the rental check into a local savings account until the end of each month.If the annual interest that the tenant can earn on this account is 5% and interest is compounded monthly,how much will the tenant have in his savings account at the end of the year?
A)$12,278.86
B)$12,613.94
C)$13,330.02
D)$15,917.13

Question

Quizplus · Accepted Answer

The correct answer is A.The tenant will have $12,278.86 in his savings account at the end of the year. This is because he will be earning interest on the rent money that he deposits into the account each month. The interest will be compounded monthly, which means that it will be added to the account balance each month and will then earn interest in the following month. The total amount of interest that the tenant will earn over the year is $278.86.

Suppose That a Tenant Is Interested in Renting Out a Two-Bedroom