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5 November, 02:41

On January 1, 2016, you deposited $8,000 in a savings account. The account will earn 8 percent annual compound interest, which will be added to the fund balance at the end of each year. Required: 1. What will be the balance in the savings account at the end of 10 years?

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  1. 5 November, 02:44
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    The final value is $17,271.40

    Explanation:

    Giving the following information:

    On January 1, 2016, you deposited $8,000 in a savings account. The account will earn an 8 percent annual compound interest, which will be added to the fund balance at the end of each year.

    To calculate the final value we need to use the following formula:

    Final Value = Present Value * (1+i) ^n

    PV = 8,000

    i = 0.08

    n=10

    FV = 8,000 * (1+0.08) ^10 = $17,271.40
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