Question

Lloyd opened a savings account 13 years ago with a deposit of $5,003.86 the account has an interest rate of 3.7% compounded daily. How much interest has Lloyd earned?

5,189.00
8,024.70
3,090.64
8,094.50

Answer 1

the answer to this question is"D"

Answer 2

Option C is the answer: $3,090.64

Explanation:

Lloyd opened a savings account 13 years ago with a deposit of $5,003.86 the account has an interest rate of 3.7% compounded daily.

Means p = 5003.86

r = 3.7% or 0.037

t = 13

n = 365 (assuming there are 365 days in a year)

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

`A=5003.86(1+(0.037)/(365) )^(4745)`

=>
`A=5003.86(1.00010136)^(4745)`

A = $8094.09

Interest earned =
`8094.09-5003.86=3090.26` dollars

This is closest to option C, hence, option C is the answer.