Math CentralQuandaries & Queries


Subject: interest compounded daily
Name: Scott
Who are you: Parent

I would like to know what 4.88% interest compounded daily would amount to on $24,000.

Thank you


The expression you need is

A = P (1 + r/n)nt

where A is the accumulated value, P is the principal, r is the annual interest rate, n is the compounding times per year and t is the number of years.

You have P = $24,000, r = 0.0488 and n = 356. If you are looking for the value after 1 year then t = 1 and you get

A = 24,000 x (1 + 0.0488/365)365 = 24,000 x 1.0500 = 25,200.17


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