Question

if $8,000 is deposited in an account paying 12% compounded monthly, then what amount will be in the account after 7 years? ( please include solutions, thank you)

Answer 1

Rate = rate / 12monthsrate = .12 / 12
rate = .01

Total = 8,000 *(1.01)^ 12 * 7

Total = 8,000 *(1.01)^84

Total = 8,000 * 2.306722744
Total = 18,453.78

Answer 2

The compound interest formula is
FV=P(1+(r/n))^n*t
FV= future value
P= principal or amount of $ deposited
r= annual interest rate in decimal form
n= number of times compounded per year
t= time in years

Therefore 8000(1+(.12/12))^12*7 which equals $18453.78