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.