Homework Help: Finance

Posted by Algebra on Wednesday, August 29, 2012 at 1:03am.

Find the amount of compound interest earned in an account that opens with $24,000, earns 7.8% interest compounded daily, and is held for 20 years. Assume 360 days in a year. (Round your answer to the nearest cent.)

Finance - Henry, Friday, August 31, 2012 at 7:21pm
P = Po(1+r)^n.

Po = $24,000.

r = (7.8%/360) / 100% = 0.00021667 = Daily % rate expressed as a decimal.

n = 360Comp./yr * 20 yrs = 7200 Compounding periods.

Plug the above values into the given Eg.
P = 114,192.41
Int. = P - Po

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