SOLUTION: a credit union client deposits $1800 in an account earning 3% interest, compounded daily. what will the balance of the account be at the end of 27 years?

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Question 865324: a credit union client deposits $1800 in an account earning 3% interest, compounded daily. what will the balance of the account be at the end of 27 years?
Answer by jim_thompson5910(35256) About Me  (Show Source):
You can put this solution on YOUR website!
We'll use the formula


A=P%281%2Br%2Fn%29%5E%28n%2At%29


where,


A = final amount


P = initial amount


r = interest rate


n = compounding frequency


t = time in years


----------------------------


In this case,


A = unknown (we're evaluating to find this)


P = 1800


r = 0.03 (from 3%)


n = 365 (assuming 365 days in a year)


t = 27


-----------------------------


Plug those values into the equation to get


A=P%281%2Br%2Fn%29%5E%28n%2At%29


A=1800%281%2B0.03%2F365%29%5E%28365%2A27%29


A=4046.09969592 Use a calculator for this step.


A=4046.10 Round to the nearest penny.


So the balance of the account in 27 years will be $4,046.10