Math Problem Statement

Following previous question: If the bank offers compound monthly interest calculation, calculate the net first month interest ($)? (Notes: Use 4 digits after decimal point)

Solution

To calculate the net first month's interest when the bank offers compound monthly interest, we need the following formula for compound interest:

A=P(1+rn)ntA = P \left(1 + \frac{r}{n}\right)^{nt}

Where:

  • AA is the amount after interest.
  • PP is the principal amount (initial deposit).
  • rr is the annual interest rate (in decimal).
  • nn is the number of times interest is compounded per year.
  • tt is the time the money is invested or borrowed for, in years.

To find the first month's interest, we will calculate the difference between the amount after 1 month and the initial principal:

First month interest=AP\text{First month interest} = A - P

Assuming:

  • PP is the principal amount.
  • rr is the annual interest rate.
  • n=12n = 12 (since interest is compounded monthly).
  • t=112t = \frac{1}{12} years (since we are calculating for one month).

Please provide the principal amount PP and the annual interest rate rr, so I can complete the calculation.

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Math Problem Analysis

Mathematical Concepts

Compound Interest
Exponential Growth

Formulas

A = P * (1 + r/n)^(nt)
First month interest = A - P

Theorems

Compound Interest Formula

Suitable Grade Level

Grades 10-12