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What is the future value of 6000 earning 18% interest, compounded monthly for 8 years

User Otravers
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1 Answer

2 votes

Answer:

To calculate the future value of an investment earning compound interest, we can use the formula:

FV = P(1 + r/n)^(nt)

where:

FV is the future value

P is the principal (starting amount)

r is the annual interest rate (as a decimal)

n is the number of times the interest is compounded per year

t is the number of years

In this case, we have:

P = 6000

r = 0.18 (18% annual interest rate)

n = 12 (compounded monthly)

t = 8

Substituting these values into the formula, we get:

FV = 6000(1 + 0.18/12)^(12*8)

FV = 6000(1.015)^96

FV = 6000(3.045)

FV = 18270

Therefore, the future value of $6000 earning 18% interest, compounded monthly for 8 years, is $18,270.

User Jaeson
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