daily compounding?

Answer 1

That means that your amount is computed daily, with yesterday's interest added to yesterday's amount to make today's principal. It's an exponential formula, cited above.

In general, for compound interest, the amount is calculated like this:

Amout = principle x (1 + (i/n))^(nt)
where i = nominal yearly interest
n = number of times per year interest is computed (for daily it would be 365 or 356.25)
t = number of years account has been active

For continuous compounding the formula is a lot simpler
Amount = principle x e^(it)
where e = the base of the natural logarithms, approx 2.718
i = nominal yearly interest rate
t = time in years

e, the base of the natural logarithms, is the limit as n goes to infinity of (1 + (1/n))^n. It is one of my favorite numbers. You can see resemblance to the compound interest formula in the expression (1 + (1/n))^n and so get a glimpse of why e comes into the figuring of continuously compounded interest.

Answer 2

B(t)= Bo (1+r/100(365) )^{365t}
where t = number of years
r=interest rate
Bo=initial balance .

Answer 3

that means that interest is compounded daily, you can calculate using the equation that steve gives above

Answer 4

A = P*(1 + i/365)^(365n)

where i = annual interest rate & n = # of years
A = present value
P = principal