Question

If $2000 is interest at an interest rate of 4.5% per year, compounded daily, find the value investment after a given number of years. (round to the nearest decimal)

Answer 1

Annual

\(2000\cdot(1 + 0.045)^{n}\)

Semi-Annual

\(2000\cdot\left(1 + \dfrac{0.045}{2}\right)^{n*2}\)

Quarterly

\(2000\cdot\left(1 + \dfrac{0.045}{4}\right)^{n*4}\)

Monthly

\(2000\cdot\left(1 + \dfrac{0.045}{12}\right)^{n*12}\)

Weekly

\(2000\cdot\left(1 + \dfrac{0.045}{52}\right)^{n*52}\)

Are you seeing a theme?

Answer 2

would daily be 365?

Answer 3

Yes.