Problema Solution
e. 360/365 method-Some financial institutions pay daily interest, compounded by the 360/365 method, using the formula A=A0(1+r/360) squared 365t (t is in years). Using this method, what will an initial investment of $1,000 be worth in 5 years, assuming a 7% annual interest rate?
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360/365 method-Some financial institutions pay daily interest, compounded by the 360/365 method, using the formula A=A0(1+r/360) squared 365t (t is in years). Using this method, what will an initial investment of $1,000 be worth in 5 years, assuming a 7% annual interest rate?
A=1000(1+0.07/360)^365*5.
=1000*1.000194^1825.
=1000*1.4259.
=$1425.93.