Answer:
Explanation:
To calculate the value of Andrea's savings account after 8 years, we need to find the balance after compounding the interest for 96 months (8 years x 12 months per year). We can use the formula for compound interest:
A = P * (1 + r/n)^(nt)
where:
A is the balance after t years,
P is the initial balance ($1700),
r is the annual interest rate (2.5%),
n is the number of times interest is compounded in a year (12),
t is the number of years (8).
Converting the interest rate to a decimal and dividing by the number of times compounded per year:
r/n = 2.5% / 12 = 0.021
Plugging in the values into the formula:
A = 1700 * (1 + 0.021)^(12 * 8) = 1700 * (1.021)^96
Calculating the value:
A = 1700 * 2.8412 = 4860.80
So, the value of Andrea's account after 8 years would be $4860.80.