Question

If you deposit $2000 into an account paying 6% annual interest, how much money will be in the account, after 5 years if it is compounded daily

Answer 1

$2,699.72

Explanation:

Given that

The deposited amount is $2,000

The annual rate of interest is 6%

And, the time period is 5 years

We need to find out the amount that would be in the account in the case when it is compounded daily

So,

The following formula should be used

= Deposited amount × e^(rate, time period)

= $2,000 × e^(0.06,5)

= $2,000 × e^0.3

= $2,699.72