Answer:
$1895.64
Step-by-step explanation:
Given:
Principle for the first year = $100
rate of interest = 6% compounded monthly
thus,
rate per month, r = \frac{\etxtup{6}}{\textup{12}}= 0.5% = 0.005
Total time = 10 year\
Now,
for the first year
number of months, n = 12
Amount at the end of first year = Principle × ( 1 + r )ⁿ
on substituting the values, we get
Amount at the end of first year = 100 × ( 1 + 0.005 )¹²
or
Amount at the end of first year = $106.17
Therefore,
The principle amount for the consecutive years will be
= $1000 + Amount at the end of first year
= $1000 + $106.17 = $1106.17
Thus, for the rest 9 years
n = 9 × 12 = 108
Principle = $1106.17
Final amount after the end of 10th year = Principle × ( 1 + r )ⁿ
or
Final amount after the end of 10th year = $1106.17 × ( 1 + 0.005 )¹⁰⁸
or
Final amount after the end of 10th year = $1895.64
