Bucher Credit Bank is offering 5.8 percent compounded daily on its savings accou
ID: 2772827 • Letter: B
Question
Bucher Credit Bank is offering 5.8 percent compounded daily on its savings accounts. Assume that you deposit $5,500 today.
How much will you have in the account in 6 years? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Use 365 days in a year. Round your answer to 2 decimal places (e.g., 32.16).)
How much will you have in the account in 12 years? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Use 365 days in a year. Round your answer to 2 decimal places (e.g., 32.16).)
How much will you have in the account in 24 years? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Use 365 days in a year. Round your answer to 2 decimal places (e.g., 32.16).)
Bucher Credit Bank is offering 5.8 percent compounded daily on its savings accounts. Assume that you deposit $5,500 today.
Requirement 1:How much will you have in the account in 6 years? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Use 365 days in a year. Round your answer to 2 decimal places (e.g., 32.16).)
Requirement 2:How much will you have in the account in 12 years? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Use 365 days in a year. Round your answer to 2 decimal places (e.g., 32.16).)
Requirement 3:How much will you have in the account in 24 years? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Use 365 days in a year. Round your answer to 2 decimal places (e.g., 32.16).)
Explanation / Answer
rate of Interest=r= 5.8%, intial Amount=A=$5,500
rate is compounded daily so rate per day is r/365=5.8%/365=58/3650 %=58/365000 ...(no rounding)
Amount P After time t=T yrs=365T days is given by compounding A daily at rate 58/3650 % for 365T days,
P=A(1+58/365000)365T =>P=$5,500((365000+58)/365000)365T => P=$5,500(365058/365000)365T
1) Amount in (T=6 yrs) = $5,500(365058/365000)365*6= $5,500*(365058/365000)2190 (put this bold part directly in calculator or excel(5,500*(365058/365000)^2190) as it is so as to arrive at final value and round it to two places of decimal so that there is no intermediate rounding) ==> $5,500*(365058/365000)2190 = $7789.06
2) Amount in (T=12 yrs) = $5,500(365058/365000)365*12= $5,500*(365058/365000)4380 =$11030.82
3) Amount in (T=24 yrs) = $5,500(365058/365000)365*24= $5,500*(365058/365000)8760=$22123.44
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