Question

Spartan Credit Bank is offering 7.6 percent compounded daily on its savings accounts. You deposit $6,000 today. How much will you have in the account in 5 years, 10 years, 20 years?

Answer 1

5 years = $8777.36

10yeras = $12,828.64

20years = $27,429.01

Step-by-step explanation:

Future Value(FV) =?

INTEREST RATE= 7.6% daily = (0.076/365)

Present value = $6,000

A) Future value in 5 years

FV = PV ×(1 + r)^n

FV = $6000 × (1 + (0.076/365))^(5×365)

FV = $6000 ×1.462226748225

=$ 8,773.36

B.) 10 years

FV = $6000 × (1 + (0.076/365))^(10×365)

FV = $6000 × 2.138107063225316

FV = $12,828.64

C. 20 years

FV = $6000 × (1 + (0.076/365))^(20×365)

FV = $6000 × 4.5715018138139866

FV = $27,429.01

Answer 2

FV in 5 years $8,654

FV in 10 years $12,482

FV in 20 years $25,965

Step-by-step explanation:

Future value is the amount that includes the principal amount invested and interest earned on this amount including the compounding effect.

Formula for Future value is as follow

FV = PV ( 1 + r )^n

Where

PV = Present value = $6,000

r = rate of interest = 7.6%

FV= Future Value

5 years

n = numbers of year = 5

FV = $6,000 (1 + 7.6%)^5 = $8,654

10 years

n = numbers of year = 10

FV = $6,000 (1 + 7.6%)^10 = $12,482

20 years

n = numbers of year = 20

FV = $6,000 (1 + 7.6%)^20 = $25,965