Question

Kennedy invested $5,000 in an account paying an interest rate of 6.4% compounded daily. Assuming no deposits or withdrawals are made, how much money, to the nearest cent, would be in the account after 15 years?

Answer 1

Explanation:

Compounding interest formula

FV = PV ( 1 + i)^n i = decimal interest per period ( period is 1 day)

= .064/365

n = periods = 15 X 365 = 5475

PV = present value = 5000 dollars

FV = $ 5000( 1 + .064/365)^5475 = 13057.38 dollars