Question

$6,000 for 6 years at 8½% compounded daily will grow to ?

Answer 1

When an amount
`P` is invested for
`t` years during which it earns an interest of
`r` dollars compounded
`m` times per year, the formula to calculate the amount that investment grows to after
`t` years is,

`A=P(1+\tfrac{r}{m})^(mt).`

Assuming that a years has 365 days ,the values for each of these variables is given as follows,
`m=365` ,
`t=6`
`r=8.5\%=0.085 .` The value of the investment after 6 years is then calculated as shown below,

`A=P(1+\tfrac{r}{m})^(mt)\\A=6000(1+\tfrac{0.085}{365})^((365* 6))\\A=9991.15`

The investment grows to reach $9991.15 in 6 years.