Question

@dss08a @surjithayer @Loveiskey18 @atlas

Cooper deposited $200 into a savings account that earns 8.4% compounded monthly. He plans on keeping the money in the account for 6 months and depositing an additional $100 each month. At the end of 6 months, how much interest will Cooper have earned?

A. $17.00
B. $17.75
C. $18.90
D. $20.50

Answer 1

There are again multiple ways of solving it.

Answer 2

Start with $200. Find the interest for the first month.
Cooper will get interest on ($200 + interest for 1st month + $100 deposited after first month) in the second month.
Do this for 6 months and you have your answer

Answer 3

im confused

Answer 4

oh you see in simple interest your principal amount remains same. So if you deposit $200 in the bank for 6 months @ simple interest you will get interest every month for $200 amount only

Answer 5

8.4%

Answer 6

But in compund interest if you deposit $200 at compound interest for 8.4% - your interest of the first month will get added to your principal amount
($200 + interest) and your interest on the second month will be calculated on this new principal

Answer 7

o gosh im confused

Answer 8

ha ha ha........let me do the first step for you
1st month
Amount at the bank - $200
Interest - (8.4/100) *$200 * (1/12) = $1.4
(Principal * Rate * Time/100)

So in the second month, the amount at the bank becomes
$200 + $1.4 + (Every month deposit)$100
2nd month
Amount in the bank = $301.4
Now you can calculate interest on this. Continue this process for 6 months

Answer 9

Did you understand the process?

Answer 10

yes

Answer 11

great