Question

Alexis has a savings account that earns 2.1% interest compounded daily. If she opened the account 17 years ago with a deposit of $2,914.72, how much interest has Alexis earned?

Answer 1

Compound Interest Formula: A = P(1 + r/n)^(n·t)

A = final amount r = rate, as a decimal (.021) t = number of years (17)

P = initial amount (2914.72) n = number of times compounded per year (365)

A = 2914.72(1 + .021/365)^(365·17) = $4165.20

Interest earned: $4165.20 - $2914.72 = $1250.48 <----- Answer

You might want to recalculate this, attempting to handle leap years, by replacing the number of times compounded per year with 365.25 and see if that has an effect