Answer:
$3,113,34
Step-by-step explanation:
The formula for calculating compound interest is
[tex]A=P(1+\frac{r}{n})^{nt}[/tex]
Where
A=the future total value, i.e, the money you will have after t years.
P=the initial deposit.
r=the annual interest rate.
n=the number of times that interest is compounded per year.
t=the number of years the money is saved.
In our case
A is unknown and we will have to calculate it with the formula.
P=$12,000
r=2.9%=0.029
n=365 because the interest is compounded daily and there are 365 days in a year
t=8 years
Applying the formula we get
[tex]A=12,000(1+\frac{0.029}{365})^{365\times8}[/tex]
[tex]A=12,000(1+\frac{0.029}{365})^{2,920}[/tex]
[tex]A=12,000(1.000079)^{2,920}[/tex]
So A=15,113.336
This is the amount of money you would have after 8 years.
Subtracting the initial deposit from this amount we obtain the interest earned I
I=15,113.336-12,000=3,113.336
Rounded to the nearest hundreth
I=$3,113,30
