Final answer:
To calculate compound interest, use the formula A = P(1 + r/n)^(n*t), where A is the future amount, P is the principal, r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the number of years. In this case, the total amount after 13 years with compound interest is $10,648.58.
Step-by-step explanation:
To calculate compound interest, we can use the formula:
A = P(1 + r/n)^(n*t)
where:
- A is the future amount of the investment
- P is the principal (initial amount of investment)
- r is the annual interest rate (expressed as a decimal)
- n is the number of times the interest is compounded per year
- t is the number of years
In this case, the principal is $8000, the annual interest rate is 2.1%, and it is compounded annually. So the formula becomes:
A = 8000(1 + 0.021/1)^(1*13)
Simplifying this equation, we get:
A = 8000(1.021)^13 = $10,648.58
Therefore, the total amount after 13 years with compound interest is $10,648.58.