Final answer:
To calculate the future value of $2,988 invested for 8 years at 5.1% compounded annually, use the formula Future Value = Principal × (1 + Interest Rate)^Number of Periods. The resulting future value is approximately $4,415.64.
Step-by-step explanation:
The question asks for the calculation of the future value of a lump sum investment over a period of time with compound interest. To find the future value of $2,988 invested for 8 years at a 5.1% annual interest rate, compounded annually, you use the compound interest formula:
Future Value = Principal × (1 + Interest Rate)^Number of Periods
Plugging in the values:
Future Value = $2,988 × (1 + 0.051)^8
Calculating the above expression gives us:
Future Value = $2,988 × (1.051)^8
Future Value = $2,988 × 1.477454547
Future Value = $4,415.64 (rounded to two decimal places)
The future value of the investment after 8 years will be approximately $4,415.64.