Question

A credit union pays 5% annual interest, compounded daily, on savings deposits. Find the value after one year of $500 deposited in this account.

$520.40

$25.64

$525.64

$20.40

can i have some help on this one please

Answer 1

Use the compound interest formula

\(A = P (1 + \frac{r}{n})^{nt} \)

P = principal amount (the initial amount you borrow or deposit)
r = annual rate of interest (as a decimal)
t = number of years the amount is deposited or borrowed for.
A = amount of money accumulated after n years, including interest.
n = number of times the interest is compounded per year