Subject: figuring interest compounded daily
How do I figure interest that is compounded daily? 8% compounded daily. Your prompt answer would be greatly appreciated.
I assume that the interest rate is 8% per year, compounded daily.
If you invest $A at an interest rate of r for t years, compounded n times per year then the balance after the t years is
Hence if you invest $A at 8% for t years compounded daily then the balance after t years would be
A very good approximation to this is given by expression
where e, the base for the natural logarithms, is approximately 2.71828Cheers,