Question

Fan & medal...

8. Garrett has deposited $519 in a savings account that earns interest at a rate of 4.2% compounded daily. What will the account balance be in 17 years?
A. $540.80
B. $1,044.52
C. $1,059.83
D. $2,179.0

Answer 1

Please teach me how to solve this...

Answer 2

So the equation for compound interest is A = P(1 + r/n)^nt
Each variable represents:
A = Accrued Amount (principal + interest)
P = Principal Amount
r = Annual Nominal Interest Rate as a decimal
t = Time Involved in years
n = number of compounding periods per unit t; at the END of each period

So you plug in the numbers for each variable making the equation
A = 519(1+0.042/365)^365*17

Note: The 365 is taken from there being 365 days in a year, since the interest is compounded daily.

After putting that into your calculator, you should get C

Answer 3

p = $519
r = 0.42
t = 17
n = ?

Answer 4

How did you find n?

Answer 5

n=365 because that is how many times the interest is compounded in a year

Answer 6

Oh, okay thank you. I also have this question
Rebecca deposited $5,338.18 into a savings account with an interest rate of 5.9% compounded twice a year. About how long will it take for the account to be worth $10,000?

Would that mean the equation is "A = 5338.11(1 + .059/2)^2*t"?

Answer 7

In this problem you know what A is, but not t. So your equation would look like
10,000 = 5,338.18(1+0.059/2)^2*t

Answer 8

What would be the answer to that question? My answer list is
A. 15 years, 11 months
B. 32 years, 5 months
C. 10 years, 10 months
D. 11 years, 0 months

The equation gave me "144.99610852".

Answer 9

If I rounded that to 145 and that represents months that's 12 years and 1 month, but that isn't an answer choice. (Sorry for all the questions.)

Answer 10

http://www.calculatorsoup.com/calculators/financial/compound-interest-calculator.php

I use this online calculator quite a bit to help me out, but the answer I got is 10.8 years which would be C (: