Question

In investment of $500 earns 1.9%interest and is compounded daily

Answer 1

Remember that the formula for compound interest is:

$P(1 + \dfrac{r}{n})^{nt}$

• $P$ is the principal, or starting amount
• $r$ is the interest rate, represented as decimal
• $n$ is the number of times the investment is compounded per year
• $t$ is the amount of years the investment is compounded over

In this case,

• $P = 500$ because we start our investment at $500
• $r = .019$ because our interest rate is 1.9%
• $n = 365$ because the investment is compounded daily, or 365 times per year
• The problem does not state a value for $t$

Thus, the formula for this problem would be

$\boxed{500(1 + \dfrac{.019}{365})^{365t}}$.