Question

A bank offers a savings account with an annual interest rate of 0.8%, with interest compounded monthly. If you invest $4,000 in the account, how much will be in the account after 10 years? g

Answer 1

Answer:

FV= $8,913.91

Explanation:

Giving the following information:

Annual interest rate= 0.8% interest compounded monthly

Initial investment= $4,000

Number of periods= 10*12= 120

First, we need to calculate the monthly interest rate:

i= 0.08/12= 0.0067

Now, using the following formula, we can calculate the future value.

FV= PV*(1+i)^n

FV= 4,000*(1.0067^120)

FV= $8,913.91