On July 2, Natalie deposited $4500 into a savings account that pays 5.5% interest compounded daily. On July 24, how much interest has she earned on principal?
Any help at all would be awesome! I have no idea how to do this! Thank you!

Question

johnweldon1993 · Answer

So lets see, interest would look like $\large V = P(1 + \frac{r}{n})^{nt}$

We know P = 4500, r(in decimal form) = 0.055, n = 365 (it's daily) and t(in years) is (22/365)

*it was only in there for 22 days..so the fraction of a year would be 22/365 for 't'

So lets plug everything in

$$\large V = 4500(1 + \frac{0.055}{365})^{365\times \frac{22}{365}}$$
$$\large V = 4500(1 + \frac{0.055}{365})^{22}$$

What do you get for V?

anonymous · Answer

I got 4,514.94

johnweldon1993 · Answer

What I arrived at as well..meaning the total interest earned in those 22 days was $14.94

anonymous · Answer

How did you get $14.94?

johnweldon1993 · Answer

They want the total interest earned

What we just solved for was the total value in the bank at the end of the 22 days

So in interest it would be that value MINUS the initial value 4500

anonymous · Answer

OH! Oh my gosh. That makes total sense. Thank you so much

johnweldon1993 · Answer

Not a problem :)