Webster Bank is offering 2.8 percent compounded daily on its savings accounts. If you deposit $2,500 today, how much will you have in the account in 15 years?

Question

Quizplus · Accepted Answer

Using the formula for compound interest, we have: 
A = P(1 + r/n)^(nt), where 
A = amount after 15 years 
P = initial deposit = $2,500 
r = annual interest rate = 2.8% 
n = number of times interest is compounded per year = 365 (daily) 
t = number of years = 15

Plugging in the values, we get: 
A = 2500(1 + 0.028/365)^(365*15) 
= $3,804.84

Therefore, the best choice is D.

Webster Bank Is Offering 2