Answer:
Step-by-step explanation:
A)Initial amount deposited into the account is $6500 This means that the principal is P, so
P = 500
It was compounded daily. This means that it was compounded 360 times in a year. So
n = 360
The rate at which the principal was compounded is 3%. So
r = 3/100 = 0.03
It was compounded for 5 years. So
t = 5
The formula for compound interest is
A = P(1+r/n)^nt
A = total amount in the account at the end of t years. Therefore
A = 6500 (1+0.03/360)^360×5
A = 6500 (1+0.00008333333)^360×5
A = 6500 (1.00008333333)^1800
A = $7551.70
B) The interest earned is Total amount earned - principal. It becomes
7551.7 - 6500 = $1051.7
