SOLUTION: 20. Find the amount of money in an account after 12 years if $12,500 is deposited at 8.25% annual interest compounded daily (assume 365 days in a year). Answer:

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Question 342034: 20. Find the amount of money in an account after 12 years if $12,500 is deposited at 8.25% annual interest compounded daily (assume 365 days in a year).
Answer:

Answer by jim_thompson5910(35256) About Me  (Show Source):
You can put this solution on YOUR website!

A=P%281%2Br%2Fn%29%5E%28n%2At%29 Start with the compound interest formula


A=12500%281%2B0.0825%2F365%29%5E%28365%2A12%29 Plug in P=12500, r=0.0825 (the decimal equivalent of 8.25%), n=365 and t=12.


A=12500%281%2B0.000226027397260274%29%5E%28365%2A12%29 Evaluate 0.0825%2F365} to get 0.000226027397260274


A=12500%281.00022602739726%29%5E%28365%2A12%29 Add 1 to 0.000226027397260274 to get 1.00022602739726


A=12500%281.00022602739726%29%5E%284380%29 Multiply 365 and 12 to get 4380.


A=12500%282.69093342965448%29 Evaluate %281.00022602739726%29%5E%284380%29 to get 2.69093342965448.


A=33636.667870681 Multiply 12500 and 2.69093342965448 to get 33636.667870681.


A=33636.67 Round to the nearest hundredth (ie to the nearest penny).


So the amount of money in the account is about $33,636.67


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Jim