Question

Calculate the future value (in dollars) of $1,450 deposited into an account earring an annual simple interest rate of 5% compounded daily after 3 years. Round to the nearest cent

Answer 1

Principal (P)= $1,450

Simple Interest rate (R) = 5%

time (T) = 3 years

n = 365

Future value = Amount. + Principal

$FV=P(1+\frac{r}{n})^{nt}-P+P=P(1+\frac{r}{n})^{nt}$$\Rightarrow FV=1450(1+\frac{0.05}{365})^{365\times3}=1684.54$

Therefore, the Future value = $1684.54