Question

Question 10 (3 points)

Answer 1

Answer:

$3,090.64

Step-by-step explanation:

We shall allocate a random letter to each value, with that I explain the formula.

Initial value of investment = $5,003.86  = P

Rate of interest = 3.7% = R

Compounding interval in a year = 365 = I

Total period = 13 years = T

Value of investment in compound interest formula shall be:

$= P \times (1 + \frac{R}{(I})^{(I \times T)}$

Now, putting values in the above equation:

$= 5,003.86 \times (1 + \frac{0.037}{365}) ^{(365\times13)}$

= $8,094.50

Thus, interest earned = Total value of investment on maturity - Initially invested amount

= $8,094.50 - $5,003.86 = $3,090.64