Question

Grace invested $5,200 in an account paying an interest rate of 4.6% compounded daily. Assuming no deposits or withdrawals are made, how much money, to the nearest dollar, would be in the account after 11 years?

Answer 1

Answer:

Step-by-step explanation:

Use this formula for when compounding is either not continuous or is not annually:

$A(t)=P(1+\frac{r}{n})^{(n)(t)}$ where P is the initial investment, r is the interest rate in decimal form, n is the number of times the compounding occurs per year, and t is the time in years.  For us:

P = 5200,

r = .046,

n = 365, and

t = 11

$A(t)=5200(1+\frac{.046}{365})^{(365)(11)}$ and

$A(t)=5200(1+.000126)^{4015}$ and

$A(t)=5200(1.000126)^{4015}$ and

A(t) = 5200(1.658408042) so

A(t) = $8623.72