Author Question: If you placed $1 into an account that paid interest at a rate of 5% and compounded the interest ... (Read 165 times)

chandani · **on:** Feb 2, 2020

Question 1

The principal represents an amount of money deposited in a savings account subject to compound interest at the given rate. Find how much money will be in the account after the given number of years (Assume 360 days in a year.), and how much interest was earned.

A = P

^nt

P =

A = Pe^rt

Y =

ⁿ - 1

Principal: $30,000
Rate: 7.5%
Compounded: daily
Time: 20 years
◦ amount in account: $134,430.77; interest earned: $104,430.77
◦ amount in account: $127,435.53; interest earned: $97,435.53
◦ amount in account: $32,336.27; interest earned: $2336.27
◦ amount in account: $134,429.67; interest earned: $104,429.67

Question 2

If you placed $1 into an account that paid interest at a rate of 5% and compounded the interest monthly, how much would that account be worth in 300 years?
◦ $3.48
◦ $1,584,357.24
◦ $1793.99
◦ $3,168,714.47

nathang24 · **Reply #1 on:** Feb 2, 2020

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