Zachary invested 130 in an account paying an interest rate of 3.6% compounded daily. Assuming no deposits or withdrawals are made, how much money, to the nearest dollar, would be in the account after 11 years?

Solution

Z a c ha ry in v es t e d 130 in an a cco u n t p a y in g an in t eres t r a t e o f 3.6% 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 11 ye a rs ?

Amount : 193.16

Solution steps

Translate the problem into an equation:

A = 130 (1 + \frac{0.036}{365})^{365 \cdot 11}

130 (1 + \frac{0.036}{365})^{365 \cdot 11} = 193.15923 \dots

Round to the nearest hundredth:

193.16

Amount : 193.16