SOLUTION: Calculate the future value of 1,000 after 2 years if deposited at 2.1% interest compounded monthly

Question 1139519: Calculate the future value of 1,000 after 2 years if deposited at 2.1% interest compounded monthly
Answer by greenestamps(13203) (Show Source): You can put this solution on YOUR website!

The annual interest rate is 2.1% = 0.021.

The monthly interest rate is 1/12 of the annual interest rate: 0.021/12 = 0.00175.

Each time interest gets compounded, the current value gets multiplied by (1 plus the monthly interest rate) = 1.00175.

There are 24 months in 2 years; in 2 years the interest will be compounded 24 times.

Future value:

Use a calculator....
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