Answer:
$1890.49 (to the nearest cent)
Explanation:
Compound interest is based on the principal amount and the interest that accumulates on it in every period.
Compound Interest = P (1 + r)^n
where P = principal amount, r = annual interest rate (as a decimal), n = term, in years
So for this problem:
P = 1600
r = 1.4 ÷ 100 = 0.014
n = 12
Therefore,
Compound Interest = P (1 + r)^n
= 1600 x (1 + 0.014)^12
= 1600 x (1.014)^12
= 1890.494606...
= $1890.49 (to the nearest cent)