Final answer:
Compound interest is a method of calculating interest where the interest earned is added to the initial amount, increasing the total amount of money over time. In this case, if you invest $4 and earn interest every month by a factor of 1.5, the future amount after 12 months would be $379.60.
Step-by-step explanation:
Compound interest is a method of calculating interest where the interest earned is added to the initial amount, increasing the total amount of money over time. In this case, if you invest $4 and earn interest every month by a factor of 1.5, you can calculate the future amount using the formula for compound interest:
Future Amount = Initial Amount × (1 + Interest Rate)^(Number of Periods)
Substituting the values in the formula:
Future Amount = $4 × (1 + 1.5)^12
Calculating the expression:
Future Amount = $4 × (2.5)^12 = $379.60