Suppose you deposited $8,000 in a bank account that pays 5.25% with daily compounding based on a 360-day year.How much would be in the account after 8 months,assuming each month has 30 days?

Question

Quizplus · Accepted Answer

First, we need to calculate the daily interest rate:
5.25% / 360 days = 0.01458% per day

Next, we need to calculate the number of days in 8 months:
8 months x 30 days per month = 240 days

Using the formula for daily compounding, the amount in the account after 8 months can be calculated as:

$8,000 x (1 + 0.01458%)^240 = $8,284.94

Therefore, the answer is choice C, $8,284.94.

Suppose You Deposited $8,000 in a Bank Account That Pays