QuestionMonique invests $\$ 11,500$ in an account that earns interest at an annual rate of $4 \%$ compounded each month. Her account earns interest for 1 year.
What is the compounding period for Monique's investment? yearly monthly 12 months 1 year

Studdy Solution

STEP 1

1. Monique's investment earns interest at an annual rate of $4\%$ .
2. The interest is compounded monthly.
3. The investment period is 1 year.

STEP 2

1. Understand the meaning of compounding period.
2. Determine the compounding period based on the given information.

STEP 3

The compounding period refers to the frequency with which the interest is applied to the principal balance. In this problem, the interest is compounded monthly.

STEP 4

Since the interest is compounded monthly, the compounding period is monthly. This means that the interest is calculated and added to the account balance each month.
The compounding period for Monique's investment is:
$\text{monthly}$

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