Question

edward wants to have $50,000 in 10 years for college. what single deposit would he need to make snow into an account that pays 4.3% interest, compounded daily to meet his goal

Answer 1

Answer: Single deposit by Edward=$3594 to make it  amount for college=$50,000 in 10 years.

Step-by-step explanation:

Here Compound amount =$50,000

Time=10 years

Rate of interest=4.3%

By the Daily compound  interest formula ,we have

$Amount=Principal(1+rate/365)^{365\times\ time}\\\Rightarrow\ Amount=Principal(1+4.3/365)^{365\times\ 10}\\\Rightarrow\ 50000=P(1+.011)^{3650}\\\Rightarrow\ 50000=P(1.011)^{3650}\\\Rightarrow\ 50000=P(13.911)...........(approx)\\\Rightarrow\ P=\frac{50000}{13.911}=3594......(approx)$

Therefore Principal amount deposited by Edward is $3594.

Answer 2

Answer:

$32,526.67

Step-by-step explanation:

Let the Principle be P

amount here A= $50,000

time n= 10 years n= 10*365=3650 days

rate of interest= 4.3% compounded daily= 4.3/365

let us use compound interest formula to calculate the principle

$A= P(1+\frac{r}{100})^n$

putting all the values we get

$50000=P(1+\frac{4.3}{100\times365})^10times365$

on solving we get P= $32,526.67

therefore he need to deposit $32,526.67