Question

2.
Find the compound amount. Round to the nearest cent.

Amount: $8,470
Rate: 12%
Compounded: monthly
Time (Years): 2


A.)$10,502.80

B.)$9,486.40

C.)$10,624.77

D.)$10,754.61

Answer 1

Correct Answer: Option D

Principal Amount = P = $8,470
Interest rate = r = 12% = 0.12
Time = t = 2
Number of compounding periods in a year = n = 12
Compounded amount = A = ?

Formula for compound interest is:

$A=P(1+ \frac{r}{n})^{n*t}$

Usingthe values in the formula, we get:

$A=8470(1+ \frac{0.12}{12})^{12*2} =10754.65$

Therefore, option D is the correct answer.