The compound interest formula is : [tex] A = P(1+ \frac{r}{n})^n ^t [/tex]
where, A= Future value including the interest,
P= Principle amount, r= rate of interest in decimal form,
t= number of years and n= number of compounding in a year
Here, in this problem P= $ 51,123.21 , t= 20 years and 2 months
So, t= 20 + (2/12) years
t= 20 + 0.17 = 20.17 years
As the amount is compounded daily, so n= (12×30)= 360 [Using the traditional Banker’s rule of 30 days per month]
Thus, [tex] A = 51,123.21( 1+ \frac{r}{360})^3^6^0^*^2^0^.^1^7 [/tex]
[tex] A= 51,123.21 (1+\frac{r}{360})^7^2^6^1^.^2 [/tex]
When the interest rate is given, then we can use this equation for finding the future value.
