Zoey invested 230 in an account paying an interest rate of 6.3% compounded daily. Assuming no deposits or withdrawals are made, how much money, to the nearest hundred dollars, would be in the account after 12 years?

Solution

Z oey in v es t e d 230 in an a cco u n t p a y in g an in t eres t r a t e o f 6.3% co m p o u n d e d d ai l y . A ss u min g n o d e p os i t s or w i t h d r a w a l s a re ma d e, h o w m u c h m o n ey, t o t h e n e a res t h u n d re d d o ll a rs, w o u l d b e in t h e a cco u n t a f t er 12 ye a rs ?

Amount : 489.81

Solution steps

Translate the problem into an equation:

A = 230 (1 + \frac{0.063}{365})^{365 \cdot 12}

230 (1 + \frac{0.063}{365})^{365 \cdot 12} = 489.80829 \dots

Round to the nearest hundredth:

489.81

Amount : 489.81