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EXAMPLE 5

FINANCE. You deposit $4000 in an account that pays 2.92% annual interest. Find the balance after 1 year if the interest is compounded with the given frequency. EXAMPLE 5. Find the balance in an account. a. Quarterly. b. Daily. = 4000 1 +. 0.0292. r. 4. n.

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EXAMPLE 5

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  1. FINANCE You deposit $4000 in an account that pays 2.92% annual interest. Find the balance after 1 year if the interest is compounded with the given frequency. EXAMPLE 5 Find the balance in an account a.Quarterly b.Daily

  2. = 4000 1 + 0.0292 r 4 n 4 1 4 = 4000(1.0073) nt A = P 1 + EXAMPLE 5 Find the balance in an account SOLUTION a.With interest compounded quarterly, the balance after 1 year is: Write compound interest formula. P = 4000, r = 0.0292, n = 4, t = 1 Simplify. Use a calculator. = 4118.09 ANSWER The balance at the end of 1 year is $4118.09.

  3. 365 1 = 4000 1 + r 0.0292 365 n 365 = 4000(1.00008) ANSWER nt A = P 1 + The balance at the end of 1 year is $4118.52. EXAMPLE 5 Find the balance in an account b. With interest compounded daily, the balance after 1 year is: Write compound interest formula. P = 4000, r = 0.0292, n = 365, t = 1 Simplify. Use a calculator. = 4118.52

  4. ANSWER $2254.98 r 0.04 n 365 1095 = 2000(1.00011) nt A = P 1 + for Example 5 GUIDED PRACTICE 6. FINANCE You deposit $2000 in an account that pays 4% annual interest. Find the balance after 3 years if the interest is compounded daily. a.With interest compounded daily, the balance after 3 years is: Write compound interest formula. 3 365 P = 2000, r = 0.04, n = 365, t = 3 = 2000 1 + Simplify. = 2254.98 Use a calculator.

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