Spartan Credit Bank is offering 5.8 percent compounded daily on its savings accounts. You deposit $4,200...

Spartan Credit Bank is offering 5.8 percent compounded daily on its savings accounts. You deposit $4,200 today

a.	How much will you have in the account in 6 years? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
b.	How much will you have in the account in 11 years? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
c.	How much will you have in the account in 18 years? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Solutions

Expert Solution

We use the formula:
A=P(1+r/365)^365n
where
A=future value
P=present value
r=rate of interest
n=time period.

a.A=4200*(1+0.058/365)^(365*6)

=4200*1.4161931

=$5948.01(Approx)

b.A=4200*(1+0.058/365)^(365*11)

=4200*1.89259578

=$7948.90(Approx)

c.A=4200*(1+0.058/365)^(365*18)

=4200*2.84032096

=$11929.35(Aprox)

jeff jeffy answered 2 years ago

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