Question

Suppose you invest $3100 in an account with an annual interest rate $12% compounded monthly

(1% each month).
Use this information to complete the table below. Round to the nearest cent as needed.
Month Starting Balance
1
2
3 $
4
5
$
$3100
$3131
$3193.93
Calculator
1% Interest
on Starting Balance
$31
$
SA
$
$32.26
SA
S
Ending Balance
$3131
$3193.93

Answer 1

Explanation:

1 $3100 $31 $3131

2 $3131 $31.31 $3162.31

3 $3162.31 $31.62 $3193.93

4 $3193.93 $31.94 $3225.87

5 $3225.87 $32.26 $3258.13

you only need to calculate 1% of every monthly starting balance and add that then to the starting balance to create the ending balance of the old month, which is then the starting balance of the new month.

1% is simply 100%/100, so the starting balance divided by 100.