Business math word problem *3

Question

Calculate the amount of interest earned in 2 years on $2,500 deposited in an account paying 5.3% interest compound daily.  

Answer 1

This one's a bit more complicated, but still just using the right formula.  The compound interest formula is:

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

A= amount you will have (not just the interest)

P = principal (deposit)

r = interest rate (as a decimal)

n = number of times per year the interest is compounded (daily = 365)

t = time in years 

 

Plug everything in, just be careful about how you do the calculation (be sure to follow the order of operations).