Question

5. You deposit $300 in an account Urat pays 1.48% annual interest. What is the balance after 1 year if the

Answer 1

Answer:

The correct option is (A) $304.47.

Step-by-step explanation:

The formula to compute the future value (FV) of an amount (A), compounded daily at an interest rate of r%, for a period of n years is:

$FV=A\times [1+\frac{r\%}{365}]^{n\times 365}$

The information provided is:

A = $300

r% = 1.48%

n = 1 year

Compute the future value as follows:

$FV=A\times [1+\frac{r\%}{365}]^{n\times 365}$

      $=300\times [1+\frac{0.0148}{365}]^{365}\\\\=300\times (1.00004055)^{365}\\\\=300\times 1.014911\\\\=304.4733\\\\\approx \ 304.47$

Thus, the balance after 1 year is $304.47.

The correct option is (A).