Question

Daniel has $1200 in the bank. He is earning 3.5% compound interest each month. How much money will he have in the bank in one year? Be sure to round to the nearest penny (hundredth)

Answer 1

The answer is 1,704

To find 3.5% of $1200 you multiply the two numbers but you have to change the percentage to a decimal which is 0.035 multiplied by $1200 which is 42 so 42 each month, so then in a year which is 12 months you multiply 42 by 12 which is 504. The last thing to do is add 504 to $1200 and the sum is 1,704

Answer 2

Daniel will have $1,704 in the bank in one year.

How to find the money Daniel will have in one year?

Compound interest is calculated by multiplying the initial loan amount, or principal, by the one plus the annual interest rate raised to the number of compound periods minus one. This will leave you with the total sum of the loan including compound interest.

Compound interest formula = p*r*t / 100

Applying the formula

= 1200 * 3.5 * 12 / 100

= $504

Total money Daniel will have in the bank after one year = $1200+$504 = $1704.

Compound interest (or compounding interest) is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

Learn more about Compound interest here: brainly.com/question/24924853

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