Question

How much money would you have if you invested $3000 at 6.25% annual interest, compounded daily for 2 years?

Answer 1

Answer:

$A\simeq3399.41$

Step-by-step explanation:

The amount formula in compound interest is:

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

where:

P = principal amount

r = annual interest

n = number of compounding periods

t = number of years

We already know that:

P = $3000

$r = 6.25\% = \frac{6.25\%}{100\%}=0.0625$

t = 2

n = 365

Then,

$A=3000(1+\frac{0.0625}{365} )^{(365)(2)}\\\\A=3000(1+\frac{0.0625}{365} )^{730}\\\\A=3399.408982\\\\A\simeq3399.41$