asked 7.1k views
3 votes
Compass Bank is offering an APR of 0.8 percent, compounded daily, on its savings accounts. If you deposit $2,500 today, how much will you have in the account in 15 years?

asked
User Jorin
by
7.8k points

1 Answer

6 votes

Final answer:

To find out the amount in a savings account after 15 years with an APR of 0.8% compounded daily from a $2,500 deposit, use the compound interest formula A = P(1 + r/n)^(nt) with P = $2,500, r = 0.008, n = 365, and t = 15.

Step-by-step explanation:

To calculate how much you will have in a Compass Bank savings account after 15 years when the account offers an APR of 0.8% compounded daily, you can use the formula for compound interest:

A = P(1 + \frac{r}{n})^(nt)

Where:
A = the amount of money accumulated after n years, including interest.
P = the principal amount (the initial amount of money).
r = the annual interest rate (decimal).
n = the number of times that interest is compounded per year.
t = the time the money is invested for in years.

In this scenario, P = $2,500, r = 0.8/100 = 0.008, n = 365 (since the interest is compounded daily), and t = 15 years.

Now, plugging the values into the formula:
A = 2500(1 + \frac{0.008}{365})^(365 * 15)

To solve this equation, you will require a calculator. Once calculated, this will give you the final amount in the account after 15 years.

answered
User Lenard
by
8.6k points

No related questions found

Welcome to Qamnty — a place to ask, share, and grow together. Join our community and get real answers from real people.