Question

I need help ASAP

Calculate the amount of interest on $2,000.00 for 4 years, compounding daily at 2.25 % APR.

From the Monthly Interest Table use $1.094171 in interest for each $1.00 invested



A $2,088.34

B $2188.34

C $2,288.34

D $2,388.34

Answer 1

Explanation:

First, we need to calculate the annual interest rate from the given APR.

APR = 2.25%

Daily interest rate = 2.25% / 365 = 0.00616438

Now, we can use the formula for compound interest:

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

Where:

A = the final amount

P = the principal (initial amount)

r = the annual interest rate (as a decimal)

n = the number of times the interest is compounded per year

t = time in years

In this case, P = $2,000, r = 0.00616438, n = 365 (daily compounding), and t = 4.

A = 2000(1 + 0.00616438/365)^(365*4)

A = 2000(1.00616438)^1460

A = $2,388.34 (rounded to the nearest cent)

Therefore, the answer is option D) $2,388.34.