Question

(Numeric Entry) Suppose you put $1000 into a money market mutual fund that paid 10% a year, where interest was compounded annually. How much money would you have at the end of the year?

Answer 1

$1100

Step-by-step explanation:

Compound Interest is a multiplying effect interest , in which interest for each successive period is calculated on (Principal + Interest) of each preceeding period .

Formula : A = P(1+r/n) power 'nt .

r = Interest rate , t = time , n = compound in time 't' , P = Principal

A = 1000 (1+10/1) power'(1X1) = 1000 X 11 power 1' = 1000 X 11 = 1100