Final answer:
To compute the future value with annual compound interest, you use the formula Future Value = Principal × (1 + interest rate)^time. The new table factor for annual compounding at an 8% rate over 29 years is (1 + 0.08)^29.
Step-by-step explanation:
The student's question revolves around the computation of compound interest, using the principal amount, time, rate of interest, and the number of compounding periods per year. To calculate the future value of the investment with annual compounding interest, the following formula is used:
Future Value = Principal × (1 + interest rate)time
In this case, the principal is $16,000, the time is 29 years, the annual interest rate is 8%, and interest is compounded annually which means the compound interest factor is (1+0.08).
Using the formula:
Future Value = $16,000 × (1 + 0.08)29
We now calculate the new table factor, which is the part of the formula (1 + interest rate)time. So for this situation, the new table factor would be:
(1 + 0.08)29