Michelle invests $8000 in a money market account that pays 3.25% interest compounded monthly. How much will be in the account after 12 years

Question

i need help

Answer 1

You have to find the future value of a single investment with compound interest The formula is

 

FV = PV*(1 + r/t)^nt where r is the annual interest rate, t is the number of compounding periods in a year and n is the number of years. This is easily solved with a spreadsheet function or a financial calculator. The variables are:

 

FV = ?

PV = 8,000

N = 12*12 = 144

i% = 3.25 / 12 = .2708333

PMT = 0

 

The answer is $11,809.62