Math Word Problem

Question

Each day, you deposit $4.47 into a bank account whose annual rate is 1% with daily compounding. How much interest will you have earned after 11 years?

Round your answer to the nearest dollar. 

Answer 1

Just use your normal compound interest formula. The daily rate is 1/365 the annual rate, right? So, after 11 years (ignoring leap days) you will have

4.47(1 + 0.01/365)^(365*11) = $5.00