Use the compound interest formula to compute the total amount accumulated.
-$3750 for 12 years at 6.5% compounded daily (use n = 360)
A) $3758.13
B) $4648.24
C) $8179.95
D) $7984.11

Question

Quizplus · Accepted Answer

The compound interest formula is A = P(1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest, P is the principal amount ($3750), r is the annual interest rate (6.5%, or 0.065 as a decimal), n is the number of times that interest is compounded per year (360), and t is the time the money is invested for (12 years). Plugging in the values: A = 3750(1 + 0.065/360)^(360*12) = $8179.95.

Use the Compound Interest Formula to Compute the Total Amount