Question

Fowler credit bank is offering 6.5 percent compounded daily on its savings accounts. you deposit $4,900 today. how much will you have in the account in 5 years?

Answer 1

P = Principle starting balance = $4,900.

r = Interest rate as a decimal = 0.065

n = number of compounds per year = 365

t = time in years of compounds = 5

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

A = $4900(1+0.065/365)^(365x5)

A = $6,780.54

After 5 years, the account will have $6,780.54 in it.

Answer 2

Identify each variable

P = 4900

r = 0.065

n =365

t = 5

A =4900( 1+ 0.065/365) ^ (365·5)

A=$6780.54

I will have in the account in 5 years $6780.54