9. diane barvello deposits $1,380 in a certificate of deposit for 3 years. find the compound amount if the interest rate is 5% compounded daily. $1,587.00 $1,603.31 $1,597.53 $1,603.32

To solve this we are going to use the formula for compounded interest: 
where 
is the final amount after  years 
is the initial amount 
is the interest rate in decimal form 
is the number of times the interest is compounded per year
is the time in years 

We know for our problem that , , and . Since the interest is compounded daily, it is compounded 365 times in year; therefore, . Lets replace those values in our formula to find :




We can conclude the amount in Diane's after 3 years will be $1,603.31