Andrew M. answered • 03/11/16

Tutor

New to Wyzant
Mathematics - Algebra a Specialty / F.I.T. Grad - B.S. w/Honors

This is a compound interest question

rather than simple nterest.

A = p(1+r/n)nt

A = future amount

p = principal investment = 200

r = interst rate as a decimal = .05

n = # times compounded per year = 12

t = time in years = 8/12 = 2/3

A = 200(1+.05/12)

^{12(2/3)}A = 206.76

After 8 months the account has $206.76.

Since we started with $200, the interest

earned is $6.76