Write an equation that would help you calculate the future value of a savings account that pays 5.2% interest compounded daily if the present value is $10,000. You will keep the savings account for 20 years and make no payments into it.

Accepted Solution

Answer:Step-by-step explanation:The compound amount formula is A = P(1 + r/n)^(n*t), where n is the number of times interest is compounded per year and t is the number of years.We could let n = 365 (since there are 365 days in each year).  Then,A = P(1 + r/365)^(365*t).Then, in this case,  A = $10,000(1 + 0.052/365)^(365*20), or                                 A = $10,000(1 + 0.000142)^7300, or                                 A = $10,000(2.829)                                      A = $28,290.07