A grandparent puts $4,000 into a college education fund for a grandchild. If the fund earns 3.75% annual interest compounded daily, what is the value (in dollars) of the account after 18 years? Assume all years have 365 days. (Round your answer to the nearest cent.)

To solve this problem, we will use the formula for compound interest, which is:

A = P (1 + r/n)^(nt)

Where: A = the amount of money accumulated after n years, including interest. P = the principal amount (the initial amount of money) r = annual interest rate (in decimal) n = number of times that interest is compounded per year t = time the money is invested for in years

In this case: P = $4,000 r = 3.75% = 0.0375 (in decimal) n = 365 (since the interest is compounded daily) t = 18 years

Substituting these values into the formula, we get:

A = 4000 (1 + 0.0375/365)^(365*18)

Now, we just need to calculate the value of A.

A = 4000 (1 + 0.00010274)^(6570) A = 4000 (1.00010274)^(6570) A = 4000 * 1.98358 A = $7934.32

So, the value of the account after 18 years will be approximately $7934.32.

To solve this problem, we will use the formula for compound interest, which is:

A = P (1 + r/n)^(nt)

Where: A = the amount of money accumulated after n years, including interest. P = the principal amount (the initial amount of money) r = annual interest rate (in decimal) n = number of times that interest is compounded per year t = time the money is invested for in years

In this case: P = $4,000 r = 3.75% = 0.0375 (in decimal) n = 365 (since the interest is compounded daily) t = 18 years

Substituting these values into the formula, we get:

A = 4000 * (1 + 0.0375/365)^(365*18)

Now, we just need to calculate the value of A.

A = 4000 * (1 + 0.00010274)^(6570) A = 4000 * (1.00010274)^(6570) A = 4000 * 2.02624 A = $8104.96

So, the value of the account after 18 years would be approximately $8104.96.