Question

You have invested $100 for 4 years at an annual rate of 12 percent, compounded
monthly. What is the future value of the investment at the end of the fourth year?

Answer 1

Answer:

$ 161.22

Step-by-step explanation:

calculate the effective rate first

$i = {(1 + \frac{0.12}{12}) }^{12} - 1 = 0.1268$

Future worth = 100 × (F/P,12.68%,4)

$fv = 100 \times {1.1268}^{4} = 161.22$