Question

Find the future value of the $3250 at 4.75% interest compounded daily for 4 years using the effective rate.

Answer 1

Future value is the value of an asset at a date which is specific in nature, it is the sum of money on today that is invested at a prescribed % that give a sum of value at the end of specified period
Effective rate of interest = (1+r/m) power m - 1
r=4.75%
m= 4 years
(1+0.0475/4)4 - 1
4.83%
Daily interest rate = 4.83%/365	0.000132329
Periods = 4*365 = 1460
	1.000132329
FV = pv(1+i)power n
3250(1+0.000132329)1460	(Amount in $)
3250(1.000132329)1460
3250(1.21311)
3942.6075