Paul deposited $95,000 in a savings account that pays 4% interest compounded daily. What is his balance at the end of six months?

Accepted Solution

Answer:[tex]\$96,919.02[/tex]  Step-by-step explanation:we know that    The compound interest formula is equal to  [tex]A=P(1+\frac{r}{n})^{nt}[/tex]  where  A is the Final Investment Value  P is the Principal amount of money to be invested  r is the rate of interest  in decimal t is Number of Time Periods  n is the number of times interest is compounded per year in this problem we have  [tex]t=6/12=0.5\ years\\ P=\$95,000\\ r=4\%=4/100=0.04\\n=365[/tex]  substitute in the formula above  [tex]A=95,000(1+\frac{0.04}{365})^{365*0.5}[/tex]  [tex]A=95,000(1+\frac{0.04}{365})^{182.5}=\$96,919.02[/tex]