Answer:
The total interest earned is $1,439.
Step-by-step explanation:
Consider the provided information:
Florence Tyler invests $6,500 in a 4-year certificate of deposit that earns interest at an annual rate of 5% compounded daily.
Now, Use the formula: [tex]A=P(1+\frac{r}{n} )^{nt}[/tex]
Where, A is the total amount (after adding interest), P is the principal (investment or loan), r is the interest rate, n is compound, and t is the time (in years).
[tex]A=P(1+\frac{r}{n} )^{nt}[/tex]
[tex]A=6500(1+\frac{0.05}{365} )^{4(365)}[/tex]
[tex]A=6500(1.00014)^{1460}[/tex]
[tex]A=6500(1.22139)[/tex]
[tex]A=7939.00918[/tex]
Therefore total interest earned is:
$7,939.00 - $6500 = $1,439.00
Hence, interest earned is $1,439.
