Question

Your broker is offering 1.2 percent compounded daily on its money market account. If you deposit $7,500 today, how much will you have in your account 15 years from now

Answer 1

Answer:

$8,985.17

Explanation:

We assume that there are 365 days in a year and that 1.2% interest rate is the annual rate.

N = 15 years x 365 days/year = 5475

r = 1.2% / 365 = 0.0033%

PV = $7,500

FV = ? We have to calculate the Future value

FV = PV $(1 + r)^{N}$

FV = 7500 $(1+0.000033)^{5475}$ = $8,985.17