A credit union client deposits $2,000 in an account earning 3% interest, compounded daily. What will the balance of the account be at the end of 22 years?

Answer 1

First we need to name some of our variables:

P = 2000 This is the amount of principal that is in the account at time 0

r = .03 This is the interest rate per year

t = 22 This is the number of years

n = 365 This is the number of time interest is compounded per year

The Compound Interest Formula is used:

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

A = 2000(1 + .03/365)^365•22

A = $3869.48