SOLUTION: Compute the amount earned on $75,000 invested at 3.26% APR in one year if compounding is taking place daily. (Round your answer to the nearest cent.)

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Question 1146252: Compute the amount earned on $75,000 invested at 3.26% APR in one year if compounding is taking place daily. (Round your answer to the nearest cent.)
Answer by Theo(13342) (Show Source):
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present value = 75,000.
interest rate = 3.26% per year / 365 = .0089315068% per day / 100 = .0000893156068 per day.
number of daily time periods = 1 year * 365 = 365.
formula to use is f = p * (1+r)^n
f is the future value
p is the present value
r is the interest rate per time period
n is the number of time periods

formula becomes f = 75000 * 1.0000893156068 ^ 365
solve for f to get:
f = 77485.17733
round to nearest cent to get f = 77485.18

the assumption is that there are 365 days in a year.
change that assumption and the future value will change accordingly.
the procedure is to get the interest rate per day by dividing the interest rate per year by the number of days in the year.
you also need to multiply the number of years by the same number of days in the year.
this formula uses the rate, not the percent.
if you use an online calculator, then you enter the percent, as shown below.
also, if you want the future value to be positive, you enter the present value as negative, and vice versa.
positive means money coming in.
negative means money going out.