Answer: 12th-year interest on interest on an amount of $1,000 is $285.31.
Explanation: Here, principal, P=$1,000, rate, R= 10%, and time, T=12 years.
We have to compute the total interest at the end of 12 years.
we will use the formula,
Amount, A= P(1 + R/100)^T
Interest, I = A - P,
1. Interest at the end of 11 years,
I1 = 1000(1 + 10/100)^11
= 2853.12
2. Interest at the end of 12 years,
I1 = 1000(1 + 10/100)^12
= 3138.43
so, 12th-year interest on interest is,
I = I2 - I1
= 3138.43 - 2853.12
= 285.31