After placing $8,000 in a savings account paying annual compound interest of 8%, calculate the amount that will accumulate if it is left for 8 years?

Question

After placing $8,000 in a savings account paying annual compound interest of 8%, calculate the amount that will accumulate if it is left for 8 years?

Answer 1

I would assume that, if you've been assigned this problem, you are familiar with the Compounding Formula:

A(t) = P(1+r/n)^nt

where P is the principal ($8,000), t is # of years, r is the annual rate of interest, expressed in decimal form (r=0.8 in your case), and n is # of times compounding per year (n=1 in your case).

 

So get busy on your calculator.