An investment of $8,350 earns 5.2% interest compounded monthly over 10 years. approximately how much interest is earned on the investment?
a. $4,342
b. $5,513
c. $5,679
d. $13,863

Hey there!

When finding compound interest, you'll use this equation:

, where:

A = final amount of money
P = Principal (initial amount of money)
r = interest rate (as a decimal, divide a percentage by 100 to get its decimal form)
n = number of times a year
t = years

We can write out all of the information that has been given in this problem:

A = what we want to find
P = 8350
r = 0.052
n = 12
t = 10

Now, just plug in all of those numbers and solve:









Remember to follow PEMDAS and do your parentheses first and your exponents second. You'll do your exponent before you do your multiplication. 





The amount of money originally invested in addition to the interest adds up to $14,029.17. To find the amount of interest alone, subtract the principal by the total we just found:

14029.17 – 8350 = 5679.17

The final amount of interest is $5,679.17, which can be rounded down to $5,679. Your answer will be C. 

Hope this helped you out! :-)