Sunfresh Markets made a 1300000 investment in a compound int

Sunfresh Markets made a $13,000.00 investment in a compound interest account paying annual interest at 6% but compounded monthly. Use the table below to determine the value of its investment at the end of 8 months $13, 259.23 $13, 529.23 $14, 259.23 $14, 529.23 The compound interest on a $3,000.00 at 7% compounded annually. Use the table below to determine the interest at the end of 3 years.

Solution

Initial Investment = $13,000

Looking at the table entry with number of perios = 8 months/1 months = 8 (since we need to calculate the amount after 8 months and 1 month is equal to 1 period)

Rate of Interest = 6% , but effective interest rate = 6%/12 = 0.5% (since it is compounded monthly)

Hence look for period 8 and interest 0.50 we get the value as 1.04071

Final Amount = 13000 * 1.04071 = $13,529.23

Hence the correct answer is Option B