Lloyd opened a savings account 13 years ago with a deposit of $5,003.86. The account has an interest rate of 3.7% compounded daily. How much interest has Lloyd earned?

Question

anonymous · Answer

calculate the value after 13 years,  the difference between that and the initial deposit is the interest earned.

anonymous · Answer

So, 5003.86*13*0.037
which is 2406.86
5003.86-2406.86=2597 ?

anonymous · Answer

use the formula$$a=p(1+\frac{ r }{ n })^{nt}$$

anonymous · Answer

where r is the rate expressed in decimal, in this case....$$a=5,003.86(1+\frac{ 0.037 }{ 365 })^{365(13)}$$

anonymous · Answer

then subtract a-p, or the answer you get from that equation minus 5,003.86 and thats the interest rate. for anyone who needs help with this problem

anonymous · Answer

for the record, the formula you used is for simple interest, this one is compounded interest, because it says compounded daily