Problema Solution
Some financial institutions pay daily interest, compounded by the 360/365 method, using the following formula. Using this method, what will an initial investment of $1,000 be worth in 5 years, assuming an 8% annual interest rate? (Round your answer to the nearest cent.)
A = A0 (1 + r360)^365t
(t is in years)
Answer provided by our tutors
r = 0.08
A0 = $1,000
t = 5 years
A = A0 (1 + r/360)^365t
A=1000(1+0.08/360)^(365*5)
A=$1500.07