Question

Sylvester puts $200,000 in a savings account. The interest rate is 1.1% compounded daily. Assuming he doesn't take any money out of his account or put any additional money in, how much money will his account have after 10 years?

A. Approximately $219,256.98
B. Approximately $225,600.22
C. Approximately $232,049.74
D. Approximately $240,534.12

Answer 1

To calculate the final amount of money in Sylvester's savings account after 10 years with an interest rate of 1.1% compounded daily, use the formula for compound interest. The approximate final amount is $232,049.74.

Step-by-step explanation:

To calculate the final amount of money in Sylvester's savings account after 10 years, we can use the formula for compound interest: A = P(1 + r/n)^(nt), where A is the final amount, P is the principal (initial amount), r is the interest rate, n is the number of times the interest is compounded per year, and t is the number of years. In this case, P = $200,000, r = 1.1% (or 0.011 as a decimal), n = 365 (compounded daily), and t = 10.

Substituting these values into the formula, we get A = $200,000(1 + 0.011/365)^(365*10). Evaluating this expression, the approximate final amount is $232,049.74. Therefore, the correct answer is C. Approximately $232,049.74.