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Bunuel
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On July 1, 1982, Ms. Fox deposited $10,000 in a new account at the ann 30 Aug 2020, 23:45
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65% (01:43) correct 35% (01:53) wrong based on 726 sessions

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On July 1, 1982, Ms. Fox deposited $10,000 in a new account at the annual interest rate of 12 percent compounded monthly. If no additional deposits or withdrawals were made and if interest was credited on the last day of each month, what was the amount of money in the account on September 1, 1982?

(A) $10,200
(B) $10,201
(C) $11,100
(D) $12,100
(E) $12,544
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B
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On July 1, 1982, Ms. Fox deposited $10,000 in a new account at the ann 31 Aug 2020, 00:06
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Given

    • On July 1, 1982, Ms. Fox deposited $10,000 in a new account at the annual interest rate of 12 percent compounded monthly.
    • No additional deposits or withdrawals were made and if interest was credited on the last day of each month.

To Find

    • The amount of money in the account on September 1, 1982.


Approach and Working Out

    • Time span = 1st July to 1st September
      o 2 months.
    • It is compounded monthly.
      o Monthly rate = 12/12 = 1%
    • Total amount = $10,000 \((1.01)^2\)
      o = $10201

Correct Answer: Option B
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Sri07
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On July 1, 1982, Ms. Fox deposited $10,000 in a new account at the ann Updated on: 31 Aug 2020, 22:26
Originally posted by Sri07 on 31 Aug 2020, 00:01.
Last edited by Sri07 on 31 Aug 2020, 22:26, edited 1 time in total.
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I used a simple method to solve this one it took me under 30 seconds.

I used approximation 2% on 2 months would be 10200 + 1 re for interest on interest portion.. therefore my answer is ans option B

If you had to understand the detailed process: (although I suggest you use the above method to solve quickly)

12% Compounded monthly means 12/12 i.e 1% per month.

First month end i.e July 31st Amount = 10,000*1% = 10100
Second Month i.e August 31st Amount = 10,000*1% = 10100 + 10100*1% = 10200 + 1%*100= 1 i.e 10201
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On July 1, 1982, Ms. Fox deposited $10,000 in a new account at the ann 31 Aug 2020, 06:32
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Bunuel
On July 1, 1982, Ms. Fox deposited $10,000 in a new account at the annual interest rate of 12 percent compounded monthly. If no additional deposits or withdrawals were made and if interest was credited on the last day of each month, what was the amount of money in the account on September 1, 1982?

(A) $10,200
(B) $10,201
(C) $11,100
(D) $12,100
(E) $12,544
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Given data,
Annual interest rate=12%
monthly interest rate=\(\frac{12}{12}\)=1%

using compound interest formula,

net amount=\(10000(1+\frac{1}{100})^2\)

=10,201
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On July 1, 1982, Ms. Fox deposited $10,000 in a new account at the ann 27 Oct 2025, 14:47
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Bunuel
On July 1, 1982, Ms. Fox deposited $10,000 in a new account at the annual interest rate of 12 percent compounded monthly. If no additional deposits or withdrawals were made and if interest was credited on the last day of each month, what was the amount of money in the account on September 1, 1982?

(A) $10,200
(B) $10,201
(C) $11,100
(D) $12,100
(E) $12,544
Show more
The standard compound interest formula is:
A = P × (1 + r/n)^(n × t)
Where:
  • P = 10,000
  • r = 0.12 (12% annual rate)
  • n = 12 (monthly compounding)
  • From July 1 to Sept 1 = 2 months → t = 2/12 = 1/6 year
So,
n × t = 12 × (1/6) = 2 compounding periods
Now plug in:
A = 10,000 × (1 + 0.12/12)2
A = 10,000 × (1.01)2
A = 10,201
Answer: $10,201 (Option B)
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