Question

$10,000 is deposited in an account in which it earns 10% interest compunded monthly. No principal or interest is withdrawn from the account. Instead, both continue to earn interest overtime. Find the account balance after six months. a.) Using the simple interest future value formula to compute the balance at the end of each compounding period.

Answer 1

10,000 (110/100)^6

Answer 2

because 6 months, each month increases by 10 percent, 100 percent+10