Jenny opens a high-interest savings account where interest of $6.48%$6.48% per annum is compounded monthly. Her initial deposit is $\$12000$$12000 and she makes monthly deposits of $\$300$$300.

a

Complete the table below, rounding each answer to the nearest cent, and using the rounded answer to calculate the amounts for the following month.

Month |
Balance at beginning of month ($\$$$) | Interest ($\$$$) | Deposit ($\$$$) | Balance at end of month ($\$$$) |

1 | $12000$12000 | $64.80$64.80 | $300$300 | $12364.80$12364.80 |

2 | $\editable{}$ | $\editable{}$ | $\editable{}$ | $\editable{}$ |

3 | $\editable{}$ | $\editable{}$ | $\editable{}$ | $\editable{}$ |

4 | $\editable{}$ | $\editable{}$ | $\editable{}$ | $\editable{}$ |

5 | $\editable{}$ | $\editable{}$ | $\editable{}$ | $\editable{}$ |

b

For many investment accounts, interest is calculated daily, but paid into the account on a monthly basis. Choose the most accurate statement.

The interest earned over a year would be more since compounding more regularly results in faster exponential growth.

A

The interest earned over a year would be less since the daily interest rate would be a lot smaller.

B

The interest earned over a year would be the same.

C

The interest earned over a year would be more since compounding more regularly results in faster exponential growth.

A

The interest earned over a year would be less since the daily interest rate would be a lot smaller.

B

The interest earned over a year would be the same.

C

Easy

Approx 12 minutes

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