$8,000 is invested at an annual rate of 6% with interest compounded monthly. find the balance of the investment after 5 years

The effective annual interest rate may be calculated by,
 
                                        ieff = (1 + i/m)^m - 1

where i = 6% and m = 12

Substituting the known values to the equation,
 
                                     ieff = (1 + 0.06/12)^12 - 1 = 0.06168

Solving for the balance of the investment in 5 years,
 
                                    F = P x (1 + ieff)^n

where P = $8,000 and n = 5
   
                                    F = $8,000 x (1 + 0.06168)^5 = $10,790

Therefore, the future balance of investment is $10,790.