Compound Interest Compounded Monthly

When interest is compounded monthly (twelve times a year), the annual rate is divided by 12 and the number of periods is multiplied by 12. The amount is

The rate per month is $\dfrac{r}{12}\%$, so $\dfrac{r/12}{100} = \dfrac{r}{1200}$, and $12t$ counts the months in $t$ years — for example, $t = 4$ months $= \dfrac{4}{12}$ year gives $12t = 4$ monthly periods.