A girl opens a saving account with $100 and the bank pays 1 % monthly interest rate, how much money she will have after 12 months
To find out how much money the girl will have after 12 months with a 1% monthly interest rate, you can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the final amount
P = the principal amount (initial deposit)
r = the annual interest rate (1% or 0.01 as a decimal)
n = the number of times interest is compounded per year (assuming monthly in this case)
t = the number of years
In this scenario, the principal amount (P) is $100, the annual interest rate (r) is 0.01, the number of times interest is compounded per year (n) is 12 (monthly), and the number of years (t) is 1.
Plugging these values into the formula:
A = 100(1 + 0.01/12)^(12*1)
Simplifying the formula:
A = 100(1 + 0.000833)^12
A = 100(1.000833)^12
A = 100(1.01006843)
Calculating the final amount (A):
A ≈ $101.01
Therefore, the girl will have approximately $101.01 in her savings account after 12 months with a 1% monthly interest rate.