Final answer:
The future value of an investment with compound interest can be calculated using the formula FV = PV * (1 + r/n)^(n*t), where FV is the future value, PV is the present value, r is the interest rate, n is the compounding frequency, and t is the number of years. In this case, the student will have approximately $27,131.30 after 8 years.
Step-by-step explanation:
To calculate the future value of an investment with compound interest, we can use the formula:
FV = PV * (1 + r/n)^(n*t)
Where:
- FV is the future value of the investment
- PV is the present value of the investment
- r is the annual interest rate
- n is the number of times interest is compounded per year
- t is the number of years
Applying these values to the given question, we have:
FV = 18,000 * (1 + 0.075/12)^(12*8)
FV ≈ $27,131.30