Question

Mr. Weinstein has a savings account with a balance of $ 19,211.34. It pays 1.1 % interest compounded daily. What is his ending balance after three years, if no other deposits or withdrawals are made? How much interest does he earn over the three years?

Answer 1

His ending balance is $19,855.88 and interest earn over the year is $644.54

Explanation:

To solve this, we will simply use the formula;

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

where P = principal

R = rate

T = time

n =the number of times that the interest is compounded per unit t.

A = The accrued amount

From the question given

Principal(p) = $19,211.34

Rate(r) = 1.1 % = 0.011

Time(t) = 3

n = 365

We can now proceed to insert our values into the formula;

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

=$19,211.34( 1 + 0.011/365)^3×365

=$19,211.34(1+0.000030137)^1095

=$19,211.34(1.000030137)^1095

=$19,211.34×1.0335500408

=$19,855.88

Therefore his ending balance is $19,855.88

To calculate the interest;

A = P + I

$19,855.88 = $19,211.34 + I

Subtract $19,211.34 from both-side of the equation

$19,855.88 - $19,211.34 = $19,211.34- $19,211.34 + I

$644.54 = I

Therefore interest earn over the year is $644.54