Answer: To solve this problem, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
where:
A = the amount of money after the given time period
P = the principal (starting amount)
r = the annual interest rate (as a decimal)
n = the number of times the interest is compounded per year
t = the time period (in years)
In this case, the principal is $6500, the annual interest rate is 2.8% (or 0.028 as a decimal), and the interest is compounded monthly (so n = 12). We want to find the amount after 2 years, so t = 2.
Plugging these values into the formula, we get:
A = 6500(1 + 0.028/12)^(12*2)
A ≈ $7,107.08
Therefore, the amount of money after 2 years is approximately $7,107.08.
Explanation: