Interest on interest, or compound interest, is the adding of interest to the principal sum of a loan or deposit. Mike's account balance after 21 years is $69,131.44.
<h3>What is compound interest?</h3>Interest on interest, or compound interest, is the adding of interest to the principal sum of a loan or deposit. It's the outcome of reinvesting interest rather than paying it out so that interest is received on the principal plus previously collected interest in the next quarter.,
where A is the final amount
P is the principal amount
r is the rate of interest
n is the number of times interest is charged in a year
t is the number of years
The principal amount that Mike invested is $29,000. The rate of interest is 7.24% compounded daily, for 21 years. Therefore, the account balance after 21 years is
= $69,131.44
Hence, Mike's account balance after 21 years is $69,131.44.
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