Answer: A = $7,393.78
Step-by-step explanation:
Initial amount invested in a CD at Charter Bank is $5000 This means that the principal
P = 500
It was compounded monthly. This means that it was compounded 12 times in a year. So
n = 12
The rate at which the principal was compounded is 4.9%. So
r = 4.9/100 = 0.049
The duration of the investment is 8 years. So
t = 8
The formula for compound interest is
A = P(1+r/n)^nt
A = total amount in the account at the end of t years. Therefore
A = 5000 (1+0.049/12)^12×8
A = $7,393.78
