Question

0. When Jean Gray was born in 2006, her parents deposited $2000 into an account that pays an interest rate of

23% compounded daily. If she didn't add or remove money from the account, how much would be in the
account in 2023?
Convert rate:
Calculate Period:
Balance =

Answer 1

Explanation:

To calculate the balance in Jean Gray's account in 2023, we need to use the formula for compound interest:

Balance = Principal * (1 + Interest Rate / Number of Compounding Periods)^(Number of Compounding Periods * Number of Years)

1. Convert the interest rate from a percentage to a decimal: 23% = 0.23.

2. Determine the compounding period. Since the interest is compounded daily, there are 365 compounding periods in a year.

3. Calculate the number of compounding periods between 2006 and 2023. There are 17 years between these two dates, so the total number of compounding periods is 17 * 365 = 6205.

4. Substitute the values into the formula and solve for the balance:

Balance = $2000 * (1 + 0.23 / 365)^(365 * 17)

= $2000 * (1.0006301369863014)^(6205)

≈ $2000 * 2.2084983

≈ $4416.997

Therefore, the balance in Jean Gray's account in 2023 would be approximately $4417.