Find the future value in two years of $100 that is deposited in an account, which pays 12%, compounded monthly.
A)$160.00
B)$112.70
C)$118.80
D)$125.40
E)$126.97

Question

Quizplus · Accepted Answer

We can use the formula $FV=P(1+r/n)^{nt}$, where P is the principal (100), r is the annual interest rate (12%), n is the number of times the interest is compounded per year (12), and t is the time in years (2). Plugging in these values, we get $FV=100(1+0.12/12)^{12*2}=126.97$. Therefore, the correct answer is E.

Find the Future Value in Two Years of $100 That