Linda has joined a "Christmas Fund Club" at her bank. At the end of every month, December through October inclusive, she will make a deposit of $30 in her fund. If the money earns interest at the rate of 6%/year compounded monthly, how much will she have in her account on December 1 of the following year?

Question

Linda has joined a "Christmas Fund Club" at her bank. At the end of every month, December through October inclusive, she will make a deposit of $30 in her fund. If the money earns interest at the rate of 6%/year compounded monthly, how much will she have in her account on December 1 of the following year? ​

Quizplus · Accepted Answer

The correct answer is A because the amount in the account after 12 months is $340.07. The interest rate is 6%/year compounded monthly, so the monthly interest rate is 6%/12 = 0.5%. The amount in the account after 12 months is $30 * 12 * (1 + 0.005)^12 = $340.07.

Linda Has Joined a "Christmas Fund Club" at Her Bank