Answer:
$11358.24 will be in the account after 7 years
Step-by-step explanation:
"Monthly compounding" involves interest being paid at the end of every period, which, in this case, is at the end of every month. Over 7 years, interest would be paid monthly, for a total of 7*12 payments.
Use the compound amount formula A = P(1 + r/n)^(n*t), where r = 0.08, n = 12 and t = 7 years. Then:
A = $6500(1 + 0.08/12)^(12*7). This comes out to
A = $6500(1 + 0.00666 ... )^84, or
A = $6500(1.75) = .$11358.24 (will be in the account after 7 years)
