1. 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

2. EXAMPLE 5 Find the balance in an account = 4000 1 + 0.0292 4 4 1 = 4000(1.0073) 4 = 4118.09 P = 4000, r = 0.0292, n = 4, t = 1 Simplify. Use a calculator. ANSWER The balance at the end of 1 year is $4118.09. SOLUTION a. With interest compounded quarterly, the balance after 1 year is: A = P 1 + r n nt Write compound interest formula.

3. 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 1 + 0.0292 365 365 1 = 4000(1.00008) 365 = 4118.52 Write compound interest formula. P = 4000, r = 0.0292, n = 365, t = 1 Simplify. Use a calculator. ANSWER The balance at the end of 1 year is $4118.52.

4. 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. $2254.98 ANSWER = 2000 1 + 0.04 365 3 365 = 2000(1.00011) 1095 = 2254.98 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.