Question

Bentley is going to invest $98,000 and leave it in an account for 7 years. Assuming

Answer 1

Answer:

The rate of interest for compounded daily is 2.1 6

Step-by-step explanation:

Given as :

The principal investment = $ 98,000

The Time period for investment = 7 years

Let The rate of interest compounded daily = R %

The Amount at the end up = $ 114,000

From compounded method

Amount = Principal × $(1+\dfrac{rate}{365\times 100})^{365\times Time}$

Or, $ 114,000 = $ 98,000  × $(1+\dfrac{R}{365\times 100})^{365\times 7}$

Or, $\frac{114000}{98000}$ = $(1+\dfrac{R}{36500})^{2555}$

or, 1.16326 = $(1+\dfrac{R}{36500})^{2555}$

or, $(1.16326)^{\frac{1}{2555}}$ = 1 + $\frac{R}{36500}$

1.00005919 - 1 =  $\frac{R}{36500}$

or, 0.00005919 =  $\frac{R}{36500}$

∴ R =  0.00005919 × 365000 = 2.16

Hence the rate of interest for compounded daily is 2.1 6   Answer