Question

Levi invested $5,300 in an account paying an interest rate of 2.4% compounded daily. Assuming no deposits or withdrawals are made, how much money, to the nearest cent, would be in the account after 6 years?

Answer 1

Answer: $6,120.86

Step-by-step explanation:

Formula to calculate the accumulated amount in n years (compounded daily)  is given by :-

$A=P(1+\dfrac{r}{365})^{365\times n}$

P= Initial amount

r= Rate of interest ( in decimal)

As per given , we ahve

P= $5300

r= 2.4%=0.024

n= 6 years

Put these values in formula , we get

$A=5300(1+\dfrac{0.024}{365})^{365\times6}\\\Rightarrow\ A=5300(1.00006575342)^{2190}\\\Rightarrow\ A=6120.85673631\approx6120.86$

Hence, there would be $6,120.86 in the account after 6 years.