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Question

Use the appropriate compound interest formula to compute the balance in account after the stated period of time. $25,000\$ 25,000 is invested for 55 years with an APR of 3%3 \% and daily compounding.

Solution

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Answered 1 year ago
Answered 1 year ago
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The goal is to calculate the balance in an account for 55 years that has $25000\$25000 invested at an annual percentage rate of 3%3\% and daily compounding.

To calculate the balance, apply the Compound Interest Formula for interest paid once a year:

A=P×(1+APRn)nYA=P\times \left(1+\dfrac{APR}{n}\right)^{nY}

where

AA is the accumulated balance after YY years. PP is the starting principal APRAPR is the annual percentage rate (as a decimal) nn is the number of compounding periods per year YY is the number of years

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