An employee gets paid at the end of each month and $60 is withheld from her paycheck for a retirement fund. The fund pays 1% per month (equivalent to 12% annually compounded monthly). What amount will be in the fund at the end of 30 months?
At the end of first month, the fund is $60. This fund will pay 1% interest each month in the next 29 months. This is a compound interest. So at the end of 30 ...
This shows the future value of a fund with given characteristics.