For each of the following accounts, determine the growth factor and percent change for the account value over one compounding period.

Question

Account C has a 3.9% APR compounded daily (365 times a year). Determine the account value's growth factor and percent change per compounding period.

Daily Growth Factor: .39/365+1

What is the daily percent change? 

Answer 1

The equation for compound interest rate problems is

P = P_o(1±r/t)^n(t)

r = .039

t = 365

The daily rate = .039/365

The factor for 1 compounding period (a year) = (1+(.039/365))³⁶⁵ = 1.039768317

the "growth" factor portion is = 3.9768317%