To solve this we are going to use the formula for compounded interest: 
where
is the final amount after 
years
is the initial amount
is the interest rate in decimal form
is the number of times the interest is compounded per year
is the time in years
We know for our problem that
, 
, and 
. Since the interest is compounded daily, it is compounded 365 times in year; therefore, 
. Lets replace those values in our formula to find :
We can conclude the amount in Diane's after 3 years will be <span>$1,603.31</span>
where
We know for our problem that
We can conclude the amount in Diane's after 3 years will be <span>$1,603.31</span>