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77778900000000000000

User Rarst
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1 Answer

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Answer

The $4000 invested for 8 years (96 months) at a rate of 9.8% compounded monthly becomes $31,614,378.

Step-by-step explanation

Compound interest turns the initial amount A₀ invested at a rate of r% for time t into

A = A₀ (1 + r)ᵗ

A = Amount to be earned at the end of the time period

A₀ = Initial amount invested = $4,000

r = Rate = 9.8% = 0.098

t = 35 - 27 = 8 years

But the interest is compounded monthly, so we will convert the time into months

1 year = 12 months

8 years = 8 (12 months) = 96 months

t = 96 months

A = A₀ (1 + r)ᵗ

A = 4000 (1 + 0.098)⁹⁶

A = 4000 (1.098)⁹⁶

A = 4000 (7903.59)

A = $31,614,378

Hope this Helps!!!

User Michael Mikhjian
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