Question

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?

Answer 1

The final value is $17,271.40

Step-by-step 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