Compound interest is the method of calculating in which the principle as well the interest on principle is reinvested every year and the amount at the maturity is obtained.
Victor currently owes a balance of $1,349.34 which is compounded monthly by the yearly rate of 13.66%.
Given
Balance is $ 1,349.34
APR is 13.66%.
We have to calculate the owing after one year
The amount will have to be calculated by compounding the amount monthly.
Compound Interest = P(1 + (r/12) )12t
Compound Interest = $1349.34(1+(.1366/12))12
Compound Interest = $1545.65
Therefore the amount if compounded monthly will give us the $1545.65 which will be the owing of Victor after one year and OPTION C is correct regarding the question.
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