Question

The amount that results when $6,000 is compounded at 7% annually over eight years. the interest earned in this case.

Answer 1

Answer:

The Final Investment Value is $\ 10,309.12$  

The interest earned is $\ 4,309.12$

Step-by-step explanation:

The compound interest formula is equal to  

$A=P(1+\frac{r}{n})^{nt}$  

where  

A is the Final Investment Value  

P is the Principal amount of money to be invested  

r is the rate of interest  in decimal

t is Number of Time Periods  

n is the number of times interest is compounded per year

in this problem we have  

$t=8\ years\\ P=\ 6,000\\ r=0.07\\n=1$  

substitute in the formula above  

$A=6,000(1+\frac{0.07}{1})^{1*8}$  

$A=\ 10,309.12$  

Find the interest earned

$I=A-P$

$I=\ 10,309.12-\ 6,000=\ 4,309.12$