SOLUTION: You have two saving accounts, each with an initial principal of $1000. The annual rate on both accounts is %5.25. In the first first account, interest is compounded annually. In th

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Question 1140940: You have two saving accounts, each with an initial principal of $1000. The annual rate on both accounts is %5.25. In the first first account, interest is compounded annually. In the second account, interest is compounded daily. How much more is in the second account after 10 years?
Answer by Boreal(15235) About Me  (Show Source):
You can put this solution on YOUR website!
use 3650 days, but in the interest compounding, the annual rate is divided only by 365, not by 3650. It's an annual rate, not a 10 year rate. The 3650 comes in for the 10 years. You can do it for months, dividing by 12 in the parentheses and raising to the 12*10 or 120th power. That will be a little less, $1688.52
1000*(1+(0.0525/365))^3650=$1690.40