Question 540615
For this problem, you'd use the "compounding" formula:
{{{p*((1+i)^n)=x}}}
"x" is the future amount of money. That's what we're solving for. (x=???)
"P" is the orignal amount (p=$400)
"i" is the rate of compounding interest each period. The problem says 13%, but how often does it compound? Monthly. So you need to divide it by 12. {{{i=.13/12}}}
"n" is the number of compounding periods. The problem gives you 8 months, and thankfully it's compounded monthly, so nothing to do here (n=8)
Then it's just a matter of plugging in your pieces back into the formula, and solving for X.
{{{p*((1+i)^n)=x}}}
{{{400*((1+(.13/12))^8)=x}}}
{{{400*(1.010833^8)=x}}}
{{{400*(1.090025)=x}}}
{{{x=436.01}}}
After 8 months, you would have $436.01.