3.5 Compound Interest Formula. Imagine you deposit $10,000 in a five-year cd . The account pays 5.2% interested compounded daily. How much will your $10,000 investment be worth by the end of the 5 years?. Compound Interest Formula. B = ending balance. p = principal. r = interest rate.
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B = ending balance
p = principal
r = interest rate
n = number of compounds per year
t = time (in years)
Marie deposits $1,650 for three years at 3% interest, compounded daily. What is her ending balance?
p = $1,650
r = 0.03
n = 365
t = 3
Kate deposits $2,350 in an account that earns interest at a rate of 3.1%, compounded monthly. What is her ending balance after 5 years?
p = $2,350
r = 0.031
n = 12
t = 5
Sharon deposits $8,000 in a one year CD at 3.2% interest, compounded daily. What is Sharon’s APY?
Barbara deposits $3,000 in a one year CD at 4.1% interest, compounded daily. What is her APY for the account?