Kelly invested $5,000 in a CD at Charter Bank. The annual rate is 4.9% compounded monthly. How much is her investment at the end of 8 years? Group of answer choices $2,393,78 $5,000.49 $7,393,78 $82,114.22

Answer: A = $7,393.78

Step-by-step explanation:

Initial amount invested in a CD at Charter Bank is $5000 This means that the principal

P = 500

It was compounded monthly. This means that it was compounded 12 times in a year. So

n = 12

The rate at which the principal was compounded is 4.9%. So

r = 4.9/100 = 0.049

The duration of the investment is 8 years. So

t = 8

The formula for compound interest is

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

A = total amount in the account at the end of t years. Therefore

A = 5000 (1+0.049/12) ^12*8

A = $7,393.78