Question

Zoey invested $230 in an account paying an interest rate of 6.3% compounded daily.

Assuming no deposits or withdrawals are made, how much money, to the nearest
hundred dollars, would be in the account after 12 years?

Answer 1

A ≈ $500

General Formulas and Concepts:

Pre-Alg

• Order of Operations: BPEMDAS

Algebra I

Compounded Interest Rate: A = P(1 + r/n)ⁿˣ

• A is final amount
• P is initial (principle) amount
• r is rate
• n is number of compounds
• x is number of years

Explanation:

Step 1: Define

P = 230

r = 0.063

n = 365

x = 12

Step 2: Solve for A

1. Substitute: A = 230(1 + 0.063/365)³⁶⁵⁽¹²⁾
2. Divide: A = 230(1 + 0.000173)³⁶⁵⁽¹²⁾
3. Multiply: A = 230(1 + 0.000173)⁴³⁸⁰
4. Add: A = 230(1.00017)⁴³⁸⁰
5. Exponents: A = 230(2.1296)
6. Multiply: A = 489.808