Question

Bentley invested $26,000 in an account paying an interest rate of 6.8% compounded daily. Assuming no deposits or withdrawals are made, how much money, to the nearest cent, would be in the account after 11 years?

Answer 1

Answer:

The amount of money, to the nearest cent, that would be in the account after 11 years is $54,928.20.

Step-by-step explanation:

In this case we need to compute the future value,i.e. the amount Bentley would receive at the end of a certain time period.

The amount invested by Bentley is, PV = $26,000.

The interest rate is, r = 6.8% compounded daily.

The time time is, n = 11 years × 365 = 4015.

The formula to compute the future value is:

$FV=PV\times (1+\frac{r}{365})^{n}$

Compute the the future value as follows:

$FV=PV\times (1+\frac{r}{365})^{n}$

      $=26000\times (1+\frac{0.068}{365})^{4015}\\\\=26000\times 2.1126231\\\\=54928.2006\\\\\approx 54928.20$

Thus, the amount of money, to the nearest cent, that would be in the account after 11 years is $54,928.20.