use the compound interest formula to compute the total amount accumulated and the interest earned. $7000 for…

Explanation:

Step1: Identify compound - interest formula

The compound - interest formula is $A = P(1+\frac{r}{n})^{nt}$, where $A$ is the amount of money accumulated after $n$ years, including interest, $P$ is the principal amount (the initial amount of money), $r$ is the annual interest rate (in decimal form), $n$ is the number of times that interest is compounded per year, and $t$ is the time the money is invested for in years.

Step2: Convert given values to appropriate form

Given $P=$7000$, $r = 6.5%=0.065$, $n = 12$ (compounded monthly), and $t = 3$ years.

Step3: Substitute values into the formula

$A=7000(1 +\frac{0.065}{12})^{12\times3}$. First, calculate the value inside the parentheses: $\frac{0.065}{12}\approx0.0054167$, then $1+\frac{0.065}{12}=1 + 0.0054167=1.0054167$. Next, calculate the exponent: $12\times3 = 36$. So, $A = 7000\times(1.0054167)^{36}$. Using a calculator, $(1.0054167)^{36}\approx1.213637$. Then $A=7000\times1.213637=$8495.46$.

Answer:

$8495.46$