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Using the compound interest formula, answer this question:

Sandy sold some baseball cards and put the $300 profit into a savings account at 2.5%, compounded daily. How much money will she have in a year? Round to the nearest dollar.

A. $303
B.$308
C.$305
D.$310

Respuesta :

calculista

Answer:

Option B. [tex]\$308[/tex]  

Step-by-step explanation:

we know that    

The compound interest formula is equal to  

[tex]A=P(1+\frac{r}{n})^{nt}[/tex]  

where  

A is the Final Investment Value  

P is the Principal amount of money to be invested  

r is the rate of interest  in decimal

t is Number of Time Periods  

n is the number of times interest is compounded per year

in this problem we have  

[tex]t=1\ years\\ P=\$300\\ r=0.025\\n=365[/tex]  

substitute in the formula above  

[tex]A=\$300(1+\frac{0.025}{365})^{365*1}=\$307.59[/tex]  

Round to the nearest dollar

[tex]\$307.59=\$308[/tex]  

The amount of money in the account after one year is $307.59.

What is the value of the account?

The formula for calculating future value:

FV = P (1 + r)^nm

  • FV = Future value
  • P = Present value
  • R = interest rate = 2.5 / 365 = 0.006849
  • m = number of compounding
  • N = number of years

$300 x (1 + 0.00006849)^365 = $307.59

To learn more about future value, please check: https://brainly.com/question/18760477

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