Question

Tony invested $9538 in an account at 8% compounded daily. Identify the compound

interest C after 1 years.

Answer 1

9514 1404 393

Answer:

$794.30

Explanation:

The account balance for principal P invested at rate r compounded daily for t years is ...

A = P(1 +r/365)^(365t)

We have P=$9538, r=0.08, t=1, and we want the value of P-A, the interest earned.

P-A = P(1 +0.08/365)^365 -1) = $9538(1.08327757 -1) ≈ $794.30

The interest earned in one year is $794.30.