Question

Vincent deposited $1, 650 in a savings account that earns 3.5%interest compounded daily for 90 days. Find the maturity

value after the money has been in Vincent's account for 90 days. Use the table below.
Interest by Quarter for 3.5% Compounded Daily
Assuming 90-day Quarters
Number of Quarters
1
2
3
4
$1,698.71
$1,632.46
$1,664.30
$1,678.92
Value of (1 + i)"
1.008667067
1.017409251
1.026227205
1.035121585

Answer 1

To solve this problem, we will use the formula for compound interest:

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

Where:
A = Maturity value (what we are trying to find)
P = Principal (initial deposit) = $1,650
r = Annual interest rate = 3.5%
n = Number of times the interest is compounded in a year = 365 (since interest is compounded daily)
t = Time (in years) = 90/365 = 0.246575

Plugging in the values, we get:

A = $1,650(1 + 0.035/365)^(365*0.246575)
A = $1,698.71 (rounded to the nearest cent)

Therefore, the maturity value after 90 days is $1,698.71.