Question

$16000 is invested at an APR of 3.5% compounded daily. Write a numerical expression that would compute the value

of the investment after 30 years.
Preview

Answer 1

The value of the investment after 30 years is
`\$45,720.12`

Explanation:

we know that

The compound interest formula is equal to

`A=P(1+(r)/(n))^(nt)`

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have

`t=30\ years\\ P=\$16,000\\ r=3.5\%=3.5/100=0.035\\n=365`

substitute in the formula above

`A=16,000(1+(0.035)/(365))^(365*30)`

`A=16,000(1+(0.035)/(365))^(10,950)`

`A=\$45,720.12`