Question

Mr. Weinstein has a savings with a balance of $19,211.34. It pays 4% interest compound daily. What is his ending balance after 3 years, if no deposits or withdrawals are made? How much interest does he earn in 3 years?

Answer 1

a]
The balance after 3 years will be obtained using the formula:
A=p(1+r)^n
where:
A=future value
p=principle
r=rate
n=time
From the question:
p=19,211.34, r=4%, n=3 years
thus
plugging the values in the formula we have:
A=19211.34(1+4/100)^3
simplifying this we get:
A=$21,610.145

b] Interest earned was:
=A-P
plugging the values we get:
21610.145-19211.34
=$2398.81