Use the compound interest formula for compounding more than once a year to determine the accumulated balance after the stated period.

Question

Assume that there are 365 days in a year. $10,000 deposit at an APR of 4% with a daily compounding for 6 yeaars.

 

Need steps please

 

 

A- $10,066.89

B- $9,484.62

C- $12,712.32

D-$2,400.00

Answer 1

Compound interest:

A = p(1+r/n)^nt

A = future amount

p = principal investment = 10,000

r = interest rate = .04

n = # times compounded per year = 365

t = time in years = 6

 

A = 10,000(1 + .04/365)³⁶⁵⁽⁶⁾

 

A = $12,712.32