Question

dory deposited 1150 into an account that pays 4.7 interest, compound daily. what is the compound interest formula?

Answer 1

The compound interest formula is
`A = P(1 + r/n)^(^n^t^)`. 'A' is the future value including interest, 'P' is the principal, 'r' is the annual interest rate, 'n' is the number of compounding periods per year, and 't' is the time in years.

Step-by-step explanation:

The compound interest formula is used to calculate the amount of interest earned on an investment or loan when interest is compounded over time. The standard compound interest formula is
`A = P(1 + r/n)^(^n^t^)`, where:

• A is the total amount of money including the compound interest.
• P is the principal amount (initial sum of money).
• r is the annual interest rate (in decimal).
• n is the number of times that interest is compounded per year.
• t is the time the money is invested or borrowed for, in years.

For example, if Dory deposits $1150 into an account with a 4.7% interest rate compounded daily, to find the future value of the investment, we need to convert the rate to a decimal by dividing by 100 (0.047) and use 365 for n because the interest is compounded daily. Then, we plug the values into the formula to find the total amount after a certain number of years.