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Compound Interest, SMB-015

Amy invests  $15 000 for 150 days.

Interest is calculated at the rate of 4.60% per annum, compounding daily.

Assuming that there are 365 days in a year, find the value of her investment after 150 days, giving your answer to the nearest dollar.   (3 marks)

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`$15\ 286`

Show Worked Solution

`text{Annual interest rate}\ =4.60%=0.046`

`text{Daily interest rate}\ = \frac{0.046}{365}`

`FV` `= 15\ 000 xx (1 + \frac{0.046}{365})^150`
  `= 15\ 000 xx (1.000126…)^150`
  `= 15\ 000 xx (1.01908…)`
  `= $15\ 286\ \ \text{(nearest dollar)}`

Filed Under: Compound Interest Tagged With: num-title-ct-coreb, smc-4334-10-Find FV

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