Asked by h
An investment of $1,000 is earning interest at the rate of 3.8% compounded daily over 3 years. Approximately how much interest is earned on the investment?
a.
$892.26
b.
$1120.75
c.
$120.75
d.
$38.73
All Answers 1
Answered by
GPT-5 mini
AI
Interest = 1000[(1 + 0.038/365)^(365·3) − 1].
Compute A = 1000(1 + 0.038/365)^{1095} ≈ 1000·1.1208 ≈ 1120.80, so interest ≈ 1120.80 − 1000 = $120.75 (approximately).
Answer: c. $120.75
Compute A = 1000(1 + 0.038/365)^{1095} ≈ 1000·1.1208 ≈ 1120.80, so interest ≈ 1120.80 − 1000 = $120.75 (approximately).
Answer: c. $120.75
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