Question

Helpppppppppppppp:))))

Answer 1

Given:

Principal value = $1500

Rate of interest = 7% per annum compounded daily

Time = 2 years.

To find:

The amount after 2 years.

Solution:

Formula for amount:

$A=P\left(1+\dfrac{r}{n}\right)^{nt}$

Where, P is principal, r is the rate of interest in decimals, n is the number of time interest compounded in an year and t is the number of years.

We know that 1 year is equal to 365 days and the interest compounded daily. So, n=365.

Substituting $P=1500,\ r=0.07,\ n=365,\ t=2$ in the above formula, we get

$A=1500\left(1+\dfrac{0.07}{365}\right)^{365(2)}$

$A=1500\left(\dfrac{365+0.07}{365}\right)^{730}$

$A=1500\left(\dfrac{365.07}{365}\right)^{730}$

Using calculator, we get

$A\approx 1725.39$

The amount after two years is $1,725.39. Therefore, the correct option is (c).