Total savings from monthly deposits

Question

If I add $\$1000$ to a bank account each month with the yearly interest of $2\%$ how much will I have in one year?

Answer says $\$12 111 $

I don't know how to get to that answer, can someone help me?

Answer 1

Look up the compound interest equation. The first month collects interest for $11$ or $12$ periods depending on whether you make the deposit at the start or end of the month. Each successive month draws interest for one less month. It would be a good exercise to make a spreadsheet that tracks the balance every month, adding the new deposits and interest. You will need that skill. The interest multiplies the balance by $(1+\frac {0.02}{12})$ because the period is $\frac 1{12}$ year.