Answer:
The amount in the account at the end of 8 years is about $8070.71.
Step-by-step explanation:
Given information:
Principal = $5000
Interest rate = 6% = 0.06 compounded monthly
Time = 8 years
The formula for amount after compound interest is
[tex]A=P(1+\frac{r}{n})^{nt}[/tex]
where,
P is principal.
r is rate of interest.
n is number of times interest compounded in a year.
t is time in years.
Substitute P=5000, r=0.06, n=12 and t=8 in the above formula.
[tex]A=5000(1+\frac{0.06}{12})^{(12)(8)}[/tex]
[tex]A=5000(1.005)^{96}[/tex]
[tex]A=5000(1.61414270846)[/tex]
[tex]A=8070.7135423[/tex]
[tex]A\approx 8070.71[/tex]
Therefore the amount in the account at the end of 8 years is about $8070.71.
