Answer:
$13,316.54
Explanation:
Data provided in the question:
Inflation rate, i = 1.2% = 0.012
Deposits = $11,000
Interest rate, r = 6% = 0.06
Time, t = 4 years
since compounded monthly, number of periods n = 12
Now,
Future value of money with the interest
= Deposits × [tex][1+ \frac{r}{n}]^{n.t}[/tex]
= $11,000 × [tex][1+ \frac{0.06}{12}]^{12\times4}[/tex]
= $13,975.38
Considering the inflation,
Amount after 4 years = Future value × [1 - i ]ⁿ
= $13,975.38 × [1 - 0.012]⁴
= $13,316.54
