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Brian deposited $9,808 into a savings account for which interest is compounded daily at a rate of 3.78%. How much interest will he earn after 12 years? Round answer to the hundredths place. If answer does not have a hundredths place then include zeros so it does. Do not include units in the answer. Be sure to attach your work for credit.

1 Answer

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Brian deposited $9,808 into a savings account that compounds interest on a daily basis, at a rate of 3.78%. If we want to find out how much interest he will earn after 12 years, we can use the formula:

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

where A is the amount of money after t years, P is the principal amount (which is $9,808 in this case), r is the annual interest rate (3.78% in this case), n is the number of times the interest is compounded per year (which is 365 since it compounds daily), and t is the number of years (which is 12).

So, plugging in the values we get:

A = $9,808(1 + 0.0378/365)^(365*12)

A = $9,808(1.000103972)^4380

A = $9,808(1.496812899)

A = $14,682.54

Therefore, the interest Brian will earn after 12 years is $14,682.54 - $9,808 = $4,874.54. When we round this answer to the hundredths place, we get $4,874.54.

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