Problema Solution
Find the compound interest earned by the deposit. Round to the nearest dollar.
$3,000 compounded continuously at 8.4% for 18 months. Assume 548 days.
Answer provided by our tutors
Assuming that interest is compounded on a daily basis, following interest will be earned by the deposit:
effective rate=
1+(8.4/365)=1.00023
10,000 x (1.00023)^n
Where n= number of compounding periods
=3,000 x (1.00023)^548
=3,403
interest earned= 3,403-3,000= $403