Suppose $2,300 is deposited in an account for 6 years paying 6% compounded daily. What is the future value of the account?
A) $\$ 3,296.56$
B) $\$ 2,302 \cdot 72$
C) $\$ 2,327.76$
D) $\$ 3,309.77$
E) $\$ 3,313.08$

Question

Quizplus · Accepted Answer

The future value of an account with daily compounding interest can be calculated using the formula $A = P(1 + \frac{r}{n})^{nt}$, where $A$ is the amount of money accumulated after n years, including interest, $P$ is the principal amount (the initial amount of money), $r$ is the annual interest rate (decimal), $n$ is the number of times that interest is compounded per year, and $t$ is the time the money is invested for in years. For this problem, $P = \$2,300$, $r = 6\% = 0.06$, $n = 365$ (since the interest is compounded daily), and $t = 6$ years. Plugging these values into the formula gives the future value of the account as approximately \$3,296.56.

Suppose $2,300 Is Deposited in an Account for 6 Years $3,296.56\$ 3,296.56$3,296.56

Suppose $2,300 Is Deposited in an Account for 6 Years $\$ 3,296.56$