Question

4.

Find the interest earned. Assume 3.5% interest compounded daily.
$2,310 deposited April 12 and withdrawn July 5


$17.34

$18.68

$18.46

$17.12

Answer 1

Using Compound interest formula:

The exponential function for calculating the amount of money after t years, A(t), where P is the initial amount or principal, the annual interest rate is r and the number of times interest is compounded per year is n, is given by

`A(t) = p(1+ (r)/(n) )^(nt)`

from the given information:
p = 2,310 , r = 0.035 ,
compounded daily ⇒⇒⇒ n =365
To calculate the time : deposited April 12 and withdrawn July 5
t = 2 months and 23 days = 83 days = 83/365 years
∴ n t = 365 * 83/365 = 83

Amount =

`A(t) = 2310(1+ (0.035)/(365) )^(83)` = 2,328.46

The interest earned = 2,328.6458 - 2,310 = 18.46