Question

Suppose you deposited $27,000 in a bank account that pays 5.25% with daily compounding based on a 360-day year. How much would be in the account after 8 months, assuming each month has 30 days

Answer 1

FV= $27,962.78

Step-by-step explanation:

Giving the following information:

Suppose you deposited $27,000 in a bank account that pays 5.25% with daily compounding based on a 360-day year.

First, we need to calculate the daily interest:

Interest rate= 0.0525/360= 0.000146

Now, using the following formula, we can determine the final value:

FV= PV*(1+i)^n

FV= 27,000*(1.000146^240)

FV= $27,962.78