Question

use the appropriate compound interest formula to compute the balance in the account after the stated period of time $24,000 is invested for 3 years with an APR of 3% and daily compounding.

Answer 1

Given: compound interest

Balance = P = $24,000

Time = t = 3 years

Rate = r = 3% = 0.03

Daily compounding, n = 365

so,

$A=P\cdot(1+\frac{r}{n})^{nt}$

substitute with P, r, t, and n

$\begin{gathered} A=24000\cdot(1+\frac{0.03}{365})^{365\cdot3} \\ \\ A=24000\cdot1.09417=26260 \end{gathered}$

So, the answer will be the balance after 3 years = $26,260