Igraduated from high school and received $1500 in gifts from family
and friends. you also received scholarships in the amount of $800. if you deposit
the total amount received into a 24-month cd at 5.5% compounded daily, how
much will you receive at the end of 24 months?
b. how much interest did you earn on the investment?

ANSWER:  

At the end of 24 months we will receive $2566.135 as the interest earned on $2300 is $266.135.

SOLUTION:

Given, I graduated from high school and received $1500 in gifts from family and friends. You also received scholarships in the amount of $800.

Total amount received into a 24-month CD at 5.5% compounded daily.  

We have to find how much will you receive at the end of 24 months.

Now, amount that is compounded daily is given by:

→ (1)

where A is final amount and a is deposited amount

r is interest rate.

n is number of days

t is number of years

now, a = 1500 + 800 = 2300, r = 5.5%, n = 365 days per year, t = = 2 years.

Substitute above values in (1)

So, in the end we will receive an amount of $2566.135.

Now, interest earned = received amount – deposited amount  = 2566.135 – 2300 = $266.135

Hence, at the end of 24 months we will receive $2566.135 as the interest earned on $2300 is $266.135.

- 1.613 = -1.6 or -1.61

-1.522 = -1.5 or -1.52

0.587 = 0.6 or 0.59

3.079 = 3.1 or 3.08

whats the