Levi invested 5,300 in an account paying an interest rate of 2.4% compounded daily. Assuming no deposits or withdrawals are made, how much money, to the nearest cent, would be in the account after 6 years?

Solution

L e v i in v es t e d 5, 300 in an a cco u n t p a y in g an in t eres t r a t e o f 2.4% 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 ce n t, w o u l d b e in t h e a cco u n t a f t er 6 ye a rs ?

Amount : 6120.86

Solution steps

Translate the problem into an equation:

A = 5300 (1 + \frac{0.024}{365})^{365 \cdot 6}

5300 (1 + \frac{0.024}{365})^{365 \cdot 6} = 6120.85679 \dots

Round to the nearest hundredth:

6120.86

Amount : 6120.86