Investment

1000$ is invested at 10% compound interest. What factor is the capital multiplied by each year? How much will be there after n=12 years?

Correct answer:

f =  1.1
x =  3138.4284 USD

Step-by-step explanation:

$f=1+\frac{10}{100}=\frac{1\cdot 100}{100}+\frac{10}{100}=\frac{100}{100}+\frac{10}{100}=\frac{100+10}{100}=\frac{110}{100}=\frac{11}{10}=1\frac{1}{10}=1.1$

$$\begin{gathered} n=12 \\ x=1000\cdot f^n=1000\cdot 1.1^{12}=3138.4284\text{USD} \end{gathered}$$

Try another example