Question

Levi invested $5,300 in an account paying an interest rate of 2.4% compounded daily. Assuming no deposits or withdrawals are made, how much money, to the nearest cent, would be in the account after 6 years?

Answer 1

Answer: $6,120.86

Explanation:

Formula to calculate the accumulated amount in n years (compounded daily) is given by :-

`A=P(1+(r)/(365))^(365* n)`

P= Initial amount

r= Rate of interest ( in decimal)

As per given , we ahve

P= $5300

r= 2.4%=0.024

n= 6 years

Put these values in formula , we get

`A=5300(1+(0.024)/(365))^(365*6)\\\Rightarrow\ A=5300(1.00006575342)^(2190)\\\Rightarrow\ A=6120.85673631\approx6120.86`

Hence, there would be $6,120.86 in the account after 6 years.