Question

Each year a cash grant is given to a deserving college student. The grant consists of the interest earned that year on a $440,000 savings account. What is the cash award for the year if the money is invested at an annual rate of 8.3%, compounded daily? (Round your answer to the nearest cent.)

Answer 1

Answer:

The cash award will be equal;l to $444422.01

Explanation:

We have given amount invested P = $440000

Rate of interest r = 8.3%

Time t = 1 year

As the amount is compounded on daily basis

We know that 1 year = 365 days

So rate of interest $r=\frac{1}{365}=0.00273$ %

Time period n = 365

We know that final amount is equal to $A=P(1+\frac{r}{100})^n$

So $A=440000(1+\frac{0.00273}{100})^{365}=444422.01$$

So the cash award will be equal;l to $444422.01