Question

$4000 deposit at an apr of 4% with daily compounding for 8 years

Answer 1

EXPLANATION

Let's see the facts:

Investment = Principal = P = 4,000

Interest rate = r = 4% = 0.04 (decimal form)

n= number of times the interest rate is compounding per unit of t = 365

t= time = 8

The compounding interest formula is:

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

Replacing terms:

$I=4,000(1+\frac{0.04}{365})^{365\cdot8}$

Adding numbers:

$I=4,000(1.000109589)^{2,920}$

Solving the power:

$I=4,000\cdot1.377$

Multiplying numbers:

$I=5,508$

The answer is $5,508