Answer:
Step-by-step explanation:
Using the compound interest formula [tex]A = P(1+\frac{r}{n} )^{nt}[/tex]
A = amount compounded (in $)
P = Principal (in $)
r = rate (in %)
t = time it takes to accumulate fund (in years)
n = time of compounding (in years)
Given P = $10,000, r = 4%, t = 3.5 years n = 1/12 years (since it is compounded monthly)
[tex]A = 10000(1+\frac{0.04}{(1/12)} )^{(3.5)(1/12)}\\A = 10000(1+0.48)^{0.2916}\\A = 10000(1.48)^{0.2916}\\A = 10000*1.12111\\A = 11,211.1[/tex]
Amount he will compound after 3.5years will be $11,211.1.
Amount he should invest daily = Amount compounded/time taken (in days)
Since 3.5years ≈ 1278 days
Amount he should invest daily = $11,211.1/1278
Amount he should invest daily = $8.77
