On January 1, 2016, you deposited $8,000 in a savings account. The account will earn 8 percent annual compound interest, which will be added to the fund balance at the end of each year. Required: 1. What will be the balance in the savings account at the end of 10 years?

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Livia Hensley

8 January, 08:10

On January 1, 2016, you deposited $8,000 in a savings account. The account will earn 8 percent annual compound interest, which will be added to the fund balance at the end of each year. Required: 1. What will be the balance in the savings account at the end of 10 years?

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Green Giant · Answer 1

The final value is $17,271.40

Explanation:

Giving the following information:

On January 1, 2016, you deposited $8,000 in a savings account. The account will earn an 8 percent annual compound interest, which will be added to the fund balance at the end of each year.

To calculate the final value we need to use the following formula:

Final Value = Present Value * (1+i) ^n

PV = 8,000

i = 0.08

n=10

FV = 8,000 * (1+0.08) ^10 = $17,271.40