if i was asked to compound something daily. what would I do?

Question

debbieg · Answer

use the compounding formula, with n=365

$$\Large P=A \left( 1+\frac{ r }{ n } \right)^{nt}$$

anonymous · Answer

I did. Haley has deposited $816 in a savings account that earns interest at a rate of 2.9% compounded daily. What will the account balance be in nine years?  that is the question. I put $$a=816(1+.029/365) ^(365*9)$$

anonymous · Answer

But I got something really weird that wasn't even close to an answer

debbieg · Answer

816*(1+.029/365)^(365∗9)

debbieg · Answer

try that?

anonymous · Answer

That is what I tried.

debbieg · Answer

try entering it verrrrry carefully on your calculator, lol. I got an error the first time I did it, maybe had a paren in the wrong place or something. But then it worked and gave me the right answer.

debbieg · Answer

Can also go here to evaluate: http://www.wolframalpha.com/input/?i=816%281%2B.029%2F365%29^%28365%E2%88%979%29 (It's already there for you.)

debbieg · Answer

But your method appears to be correct.

anonymous · Answer

$$a=816(1+.029/365)3285$$

anonymous · Answer

when i do .029/365 i keep geting 7. something then an e with a -5..

debbieg · Answer

yes, that's scientific notation, because 0.29/365 is a teeny, tiny number. :)

I thought you were entering the whole expression in one entry, but you can do it one step at a time if you want, again, just be careful about the order and use of parens.

debbieg · Answer

I always say, you can use too few parens but never too many! :)

anonymous · Answer

Thank you so much!

debbieg · Answer

You're welcome :)

anonymous · Answer

Can you help me with something similar? What if I was asked compounded twice a year? That one I don't understand how to set up.

debbieg · Answer

Set up the same, but only 2 compounding periods per year, so n=2.

debbieg · Answer

n=# times compounded per year. So daily means 365, twice a year means 2, monthly would mean 12, etc.

anonymous · Answer

Roberta deposited $4,790.23 into a savings account with an interest rate of 3.8% compounded twice a year. About how long will it take for the account to be worth $9,000?  so i would set this up like $$a=4790.23(1+.038/2)^2 $$