Jackson invested 8,800 in an account paying an interest rate of 7% compounded daily. Assuming no deposits or withdrawals are made, how much money, to the nearest dollar, would be in the account after 13 years?

Solution

J a c k so n in v es t e d 8, 800 in an a cco u n t p a y in g an in t eres t r a t e o f 7% 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 d o ll a r, w o u l d b e in t h e a cco u n t a f t er 13 ye a rs ?

Amount : 21860.13

Solution steps

Translate the problem into an equation:

A = 8800 (1 + \frac{0.07}{365})^{365 \cdot 13}

8800 (1 + \frac{0.07}{365})^{365 \cdot 13} = 21860.13093 \dots

Round to the nearest hundredth:

21860.13

Amount : 21860.13