Precalculus: Concepts Through Functions, A Unit Circle Approach to Trigonometry (3rd Edition)

Published by Pearson
ISBN 10: 0-32193-104-1
ISBN 13: 978-0-32193-104-7

Chapter 4 - Exponential and Logarithmic Functions - Section 4.7 Financial Models - 4.7 Assess Your Understanding - Page 346: 12


$\$ 789.24$

Work Step by Step

Recall: $A = P \left(1+\dfrac{r}{n} \right)^{n t}$ where $P:$ The principal amount $r:$ Annual interest rate $n:$ Number of compoundings per year $t:$ Number of years $A:$ Amount after $t$ years The given problem has: $P= \$ 700, r=0.06, t = 2$ $\text{Compounded daily} \to n = 365$ Thus, using these values and the formula above gives: $A = 700 \left(1+\dfrac{0.06}{365} \right)^{365 \times 2}$ $A \approx \$ 789.24$
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