Question

Samantha deposits $1,500 into the Park Street Bank. The account pays 4.12% annual interest, compounded daily. To the nearest cent, how much is in the account at the end of three non-leap years?

Answer 1

Answer:

Samantha will get $1674 after 3 years.

Step-by-step explanation:

The formula of Compound Interest is:

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

where A = Amount

P = Principle

r = rate

n = Number of Compounding per year

t = total number of year

Here, P = 1500, r = 4.12% = 0.0412, n = 365(Mon-leap years), and t = 3.

Putting all these values in above formula:

$A = 1500(1+\frac{0.0412}{365})^{365\times3}$

⇒ $A = 1500(\frac{365.0412}{365})^{1095}$

⇒ $A = 1500(1.0001)^{1095}$

⇒ $A = 1500(1.116)}$

⇒ A = 1674

Hence, Samantha will get $1674 after 3 years.