Sarah invested 3,800 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 hundred dollars, would be in the account after 15 years?

Solution

S a r ah in v es t e d 3, 800 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 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 15 ye a rs ?

Amount : 6520.65

Solution steps

Translate the problem into an equation:

A = 3800 (1 + \frac{0.036}{365})^{365 \cdot 15}

3800 (1 + \frac{0.036}{365})^{365 \cdot 15} = 6520.65243 \dots

Round to the nearest hundredth:

6520.65

Amount : 6520.65