Question

Find the future value, using the future value formula and a calculator. ( Round your answer to the nearest cent.)$41.67 at 4.5 compound daily for 3 years

Answer 1

The compound interest formula is:

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

where A is the final amount, P is the principal, r is the annual interest rate (as a decimal), n is the number of times interest is compounded per year, and t is time in years.

Substituting with P = $41.67, r = 0.045 (=4.5/100), n = 365 (the interest is compounded daily), and t = 3 years, we get:

`\begin{gathered} A=41.67(1+(0.045)/(365))^(365\cdot3) \\ A=41.67(1.00012)^(1095) \\ A=47.69\text{ \$} \end{gathered}`