EXAMPLE 5 Find the balance in an account You deposit $4000 in an account that pays 2.92% annual interest. Find the balance after 1 year if the interest.

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EXAMPLE 5 Find the balance in an account You deposit $4000 in an account that pays 2.92% annual interest. Find the balance after 1 year if the interest is compounded with the given frequency. FINANCE a. Quarterly b. Daily

EXAMPLE 5 Find the balance in an account = = 4000(1.0073) 4 = P = 4000, r = , n = 4, t = 1 Simplify. Use a calculator. ANSWER The balance at the end of 1 year is $ SOLUTION a. With interest compounded quarterly, the balance after 1 year is: A = P 1 + r n nt Write compound interest formula.

EXAMPLE 5 Find the balance in an account b. With interest compounded daily, the balance after 1 year is: A = P 1 + r n nt = = 4000( ) 365 = Write compound interest formula. P = 4000, r = , n = 365, t = 1 Simplify. Use a calculator. ANSWER The balance at the end of 1 year is $

GUIDED PRACTICE for Example 5 6. FINANCE You deposit $2000 in an account that pays 4% annual interest. Find the balance after 3 years if the interest is compounded daily. $ ANSWER = = 2000( ) 1095 = P = 2000, r = 0.04, n = 365, t = 3 Simplify. Use a calculator. a. With interest compounded daily, the balance after 3 years is: A = P 1 + r n nt Write compound interest formula.