Financial Math problem help?

C

Contaminated

New member
Calculate the amount of interest on $2,000.00 for 4 years, compounding daily at 2.25 % APR.
From the Monthly Interest Table use $1.094171 in interest for each $1.00 invested
 
FV = Initial * (1 + rate/days)^(days * years)

based upon the table, 365 days is used instead of 360.

FV = 2,500 * (1 + 0.0225/365)^(365 * 4)
FV = 2,735.43

Amount of Interest earned = 2735.43 - 2500
= 235.43

The MIT or table interest is obtained by this equation (1 + 0.0225/365)^(365 * 4)
 
Back
Top