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Homework answers / question archive / Carl deposited $5,142 into a savings account 20 years ago
Carl deposited $5,142 into a savings account 20 years ago. The account has an interest rate of 3.8% and the balance is currently $10,994.58. How often does the interest compound?
1) daily
2) monthly
3) quarterly
4) annually
The correct option is 1st "daily".
Amount = Principal*(1+Rate)^Time
= $5,142*(1+3.8%/365)^(20 years*365)
= $5,142*2.138
Amount = $10,994.58