Question

Jim opens a savings account with $22,500. his account pays 3.5% interest compounded daily. at the end of 5.5 years, jim closes the account. how much interest does he earn? what is the total value of his account when he closes it?

Answer 1

Answer:
$27,186.57

Explanation:
Formula: starting cost(interest • 1)^time
First, we need to calculate the interest which in this case it would be 1.035(1+(3.5/100)) since it is increasing 3.5% each year. Then we can just plug the values into the formula to get:

22,500(1.035•1)^5.5 = 27,186.57