Register
Suppose you decide to deposit $18,000 in a savings account that pays a nominal rate of 6%, but interest is compounded daily. Based on a 365-day year, how much would you have in the account after nine months
86,259 views
28 votes
28 votes
Suppose you decide to deposit $18,000 in a savings account that pays a nominal rate of 6%, but interest is compounded daily. Based on a 365-day year, how much would you have in the account after nine months

User Giovanni Galbo
by
2.6k points

1 Answer

18 votes
18 votes

Answer:

FV= $18,827.23

Step-by-step explanation:

Giving the following information:

Initial investment (PV)= $18,000

Interest rate (i)= 0.06/365= 0.000164

Number of periods (n)= (365/12)*9= 274 days

To calculate the future value (FV), we need to use the following formula:

FV= PV*(1 + i)^n

FV= 18,000*(1.000164^274)

FV= $18,827.23

User Stepozer
by
2.9k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

1.6m questions

2.0m answers

Other Questions

If the rate of inflation in Japan dramatically increases while the rate of inflation in the United States remains constant, then a. the demand curve for dollars shifts to the left. b. the demand curve
If you buy a one-year bond for $4,000 and the issuer pays you back $5,000 at the end of one year, the interest rate on the bond is
Kylie is risk averse and has $1,000 with which to make a financial investment. She has three options. Option A is a risk-free government bond that pays 5 percent interest each year for two years. Option
Elroy Rocket is entering his senior year as an accounting major and has a number of options for his summer break. His options for the 3 month break follow: (1) Work full time at a local accounting firm
In January of the current year, Dora made a gift of stock to her granddaughter. At the time of the gift, the stock was worth $15,000. Several months later in the same year after the gift, a $500 dividend
Link Copied!