Question

Select the correct answer. Meg deposited a $3,000 bonus check in a new savings account. The account has an interest rate of 3% for 5 years. The interest is compounded daily. How much money did Meg have at the end of the account term? (Round your answer to the nearest dollar.)

Answer 1

$3,485.48

Explanation:

For computing the money required at the end of the account term we need to apply the Future value formula i.e be to shown in the attachment below:

Given that,

Present value = $3,000

Rate of interest = 3% ÷ 365 days = 0.00821917

NPER = 5 years × 365 days = 1,825

PMT = $0

The formula is shown below:

= FV(Rate;NPER;PMT;PV;type)

So, after applying the above formula

the amount of future value is $3,485.48