Final answer:
The amount of money in the account after 8 years is approximately $118,612.62. The total amount of interest earned is approximately $62,612.62.
Step-by-step explanation:
To calculate the amount of money in the account after 8 years, we can use the compound interest formula:
A = P(1 + r/n)^(nt)
Where:
- A is the amount of money in the account after t years
- P is the principal amount (initial investment)
- r is the annual interest rate (decimal)
- n is the number of times interest is compounded per year
- t is the number of years
For this question:
- P = $56,000
- r = 12% or 0.12
- n = 4 (quarterly compound interest)
- t = 8 years
Plugging these values into the formula:
A = 56000(1 + 0.12/4)^(4*8)
Calculating this, the amount of money in the account after 8 years is approximately $118,612.62.
To find the total amount of interest earned, we can subtract the initial principal amount:
Total interest = A - P
Total interest = $118,612.62 - $56,000
Total interest = approximately $62,612.62.