Question

A kitty in a tuxedo walks into a bank deposit of $4000 in an investment account. the account earns 8% interest, compounded monthly. after 10 years how much money will the fancy kitty have?

Answer 1

The amount of money Kitty would have is;

`\text{ \$}8,878.56`

Step-by-step explanation:

Given that Kitty invested $4000 into an account that earns 8% interest compounded monthly for 10 years;

`\begin{gathered} \text{ Principal P = \$4000} \\ \text{ Rate r = 8\% = 0.08} \\ \text{ Time t =10 years} \\ \text{ number of times compounded per time n = 12} \end{gathered}`

Applying the formula for compound interest;

`F=P(1+(r)/(n))^(nt)`

Substituting the given values;

`\begin{gathered} F=4000(1+(0.08)/(12))^(12(10)) \\ F=4000(1+(0.08)/(12))^(120) \\ F=4000(2.2194) \\ F=\text{ \$}8,878.56 \end{gathered}`

Therefore, the amount of money Kitty would have is;

`\text{ \$}8,878.56`