Subject: figuring interest compounded daily

How do I figure interest that is compounded daily? 8% compounded daily. Your prompt answer would be greatly appreciated.

Debbie Bracken
I am not a teacher or a student

Hi Debbie,

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 2.71828

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