You put $1000 in a savings account which earns compound interest at a rate of 0.1% per month. If you don't make any deposits or withdrawls, how much will you have in your account in 3 years (36 months)? Round your answer to the nearest whole cent.

A. $1036.64
B. $1331.00
C. $1003.00
D. $1430.08
@Daniellelovee

Question

You put $1000 in a savings account which earns compound interest at a rate of 0.1% per month. If you don't make any deposits or withdrawls, how much will you have in your account in 3 years (36 months)? Round your answer to the nearest whole cent.

 		A.	$1036.64
 		B.	$1331.00
 		C.	$1003.00
 		D.	$1430.08
@Daniellelovee

danjs · Answer

What does your book tell you about the compound interest? The probably gave you the formula right

danjs · Answer

$$Future~Value = Present~Value*(1 + rate)^{periods}$$

daniellelovee · Answer

Simple interest formula

danjs · Answer

In 36 compounding periods, the value will become... 

1000(1.001)^(36)

daniellelovee · Answer

A = 1000(1 + (0.001 × 3))=?

danjs · Answer

This is compounding interest Daniell

daniellelovee · Answer

just listen to him @Tallan

daniellelovee · Answer

but how do you know that it is compound interest and not simple interest formula?

danjs · Answer

For each compounding period, the value of the account increases by 0.1%. That is the same as multiplying the value by 1.001.
If you do that 36 times you get

1000*(1.001)(1.001)(1.001)......36times   or 

Value = 1000(1.001)^(36)

danjs · Answer

You read the problem "...savings account which earns compound interest.."

daniellelovee · Answer

*facepalm*

danjs · Answer

$$Future~ Value= $1000*(1.001)^{36} \approx$$

anonymous · Answer

would it be A?