We appreciate your visit to Suppose you invest tex 3700 tex in an account with an annual interest rate of tex 12 tex compounded monthly tex 1 tex each month. This page offers clear insights and highlights the essential aspects of the topic. Our goal is to provide a helpful and engaging learning experience. Explore the content and find the answers you need!
Answer :
To complete the table and understand how the investment grows with monthly compounding interest, let’s go through the process of calculating each month's starting balance, interest, and ending balance.
Concept Recap:
When you invest with compound interest, the interest earned each month is added to the principal, or starting balance, for the next month. In this case, you have a 1% monthly interest rate on the initial amount.
Month-by-Month Breakdown:
1. Month 1:
- Starting Balance: \[tex]$3700.00
- Interest: 1% of \$[/tex]3700 is \[tex]$37.00
- Ending Balance: \$[/tex]3700 + \[tex]$37 = \$[/tex]3737.00
2. Month 2:
- Starting Balance: \[tex]$3737.00
- Interest: 1% of \$[/tex]3737 is \[tex]$37.37 (rounded to two decimal places)
- Ending Balance: \$[/tex]3737 + \[tex]$37.37 = \$[/tex]3774.37
3. Month 3:
- Starting Balance: \[tex]$3774.37
- Interest: 1% of \$[/tex]3774.37 is \[tex]$37.74 (rounded to two decimal places)
- Ending Balance: \$[/tex]3774.37 + \[tex]$37.74 = \$[/tex]3812.11
4. Month 4:
- Starting Balance: \[tex]$3812.11
- Interest: 1% of \$[/tex]3812.11 is \[tex]$38.12 (rounded to two decimal places)
- Ending Balance: \$[/tex]3812.11 + \[tex]$38.12 = \$[/tex]3850.23
5. Month 5:
- Starting Balance: \[tex]$3850.23
- Interest: 1% of \$[/tex]3850.23 is \[tex]$38.50
- Ending Balance: \$[/tex]3850.23 + \[tex]$38.50 = \$[/tex]3888.73
Using these steps, you can accurately track how your investment grows each month with the given conditions. Each month's interest is based on the previous month's ending balance, reinforcing the concept of compound interest.
Concept Recap:
When you invest with compound interest, the interest earned each month is added to the principal, or starting balance, for the next month. In this case, you have a 1% monthly interest rate on the initial amount.
Month-by-Month Breakdown:
1. Month 1:
- Starting Balance: \[tex]$3700.00
- Interest: 1% of \$[/tex]3700 is \[tex]$37.00
- Ending Balance: \$[/tex]3700 + \[tex]$37 = \$[/tex]3737.00
2. Month 2:
- Starting Balance: \[tex]$3737.00
- Interest: 1% of \$[/tex]3737 is \[tex]$37.37 (rounded to two decimal places)
- Ending Balance: \$[/tex]3737 + \[tex]$37.37 = \$[/tex]3774.37
3. Month 3:
- Starting Balance: \[tex]$3774.37
- Interest: 1% of \$[/tex]3774.37 is \[tex]$37.74 (rounded to two decimal places)
- Ending Balance: \$[/tex]3774.37 + \[tex]$37.74 = \$[/tex]3812.11
4. Month 4:
- Starting Balance: \[tex]$3812.11
- Interest: 1% of \$[/tex]3812.11 is \[tex]$38.12 (rounded to two decimal places)
- Ending Balance: \$[/tex]3812.11 + \[tex]$38.12 = \$[/tex]3850.23
5. Month 5:
- Starting Balance: \[tex]$3850.23
- Interest: 1% of \$[/tex]3850.23 is \[tex]$38.50
- Ending Balance: \$[/tex]3850.23 + \[tex]$38.50 = \$[/tex]3888.73
Using these steps, you can accurately track how your investment grows each month with the given conditions. Each month's interest is based on the previous month's ending balance, reinforcing the concept of compound interest.
Thanks for taking the time to read Suppose you invest tex 3700 tex in an account with an annual interest rate of tex 12 tex compounded monthly tex 1 tex each month. We hope the insights shared have been valuable and enhanced your understanding of the topic. Don�t hesitate to browse our website for more informative and engaging content!
- Why do Businesses Exist Why does Starbucks Exist What Service does Starbucks Provide Really what is their product.
- The pattern of numbers below is an arithmetic sequence tex 14 24 34 44 54 ldots tex Which statement describes the recursive function used to..
- Morgan felt the need to streamline Edison Electric What changes did Morgan make.
Rewritten by : Barada
