Answer:
$28,554.37
Step-by-step explanation:
To solve this problem, lets use the compound interest formula:
[tex]A=P(1+\frac{r}{n} )^{nt}[/tex]
P = initial balance
r = interest rate (decimal)
n = number of times compounded annually
t = time
First, change 6.5% into a decimal:
6.5% -> [tex]\frac{6.5}{100}[/tex] -> 0.065
Since the interest is compounded monthly, we will use 12 for n. Lets plug in the values now:
[tex]A=17,000(1+\frac{0.065}{12})^{12(8)}[/tex]
[tex]A=28,554.37[/tex]
The value of the mutual fund after 8 years is $28,554.37
