Homework Answers
Using the formula,
FV = C(1+r)T
since it is compounded monthly, r becomes r/12 and T becomes nT i.e 3T since 3 years
FV = C(1+r/12)3T
12894 = 12000(1+r/12)36
r/12 = (12894/12000)1/36 - 1 = 0.2%
r/12 = monthly interest rate = 0.2%
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Prepare the journal entry to record interest on June 30, 2013.
(If no entry is required for a transaction, select "No
journal entry required" in the first account field.)
5.
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