Final answer:
The question requires calculating the future value of regular monthly deposits compounded monthly. Suzana will have RM 8,531.89 in her account after 8 monthly deposits with an 8% annual interest rate compounded monthly.
Step-by-step explanation:
The student is asking how much money Suzana will have in her saving account after making 8 deposits of RM 1000 each, with an interest rate of 8% per annum compounded monthly. To solve this, we can use the future value of a series formula for compound interest:
Future Value = P × ` { [ (1 + r/n)^(nt) - 1 ] / (r/n) }
Where P is the regular deposit amount, r is the annual interest rate (expressed as a decimal), n is the number of times the interest is compounded per year, and t is the time the money is invested or borrowed for, in years. In this case, P = RM 1000, r = 0.08, n = 12, and t = 8 months (or 8/12 years).
By substituting the values into the formula and calculating, Suzana's savings can be found. Compounding means that each month's deposit earns interest for the remaining months. The final calculation gives us the correct answer, which is choice b: RM 8,531.89.
The principle of saving money early and the effect of compound interest is crucial to understand. As the example provided, saving $3,000 at a real annual rate of return of 7% compounded annually, the money grows significantly over time due to compound interest, which is the interest on the interest.