Question

If you invest $7000 in an account that pays 6% interest compounded annually, what is the total amount of money that you would have at the end of 8 years?

Answer 1

FV= $11,156.94

Explanation:

Giving the following information:

Initial investment (PV)= $7,000

Number of periods (n)= 8 years

Interest rate (i)= 6% compounded annually

To calculate the future value (FV), we need to use the following formula:

FV= PV*(1 + i)^n

FV= 7,000*(1.06^8)

FV= $11,156.94