Question

Franklin Credit Union pays 5% interest, compounded daily, from the date of deposit to the date of withdrawal. The daily interest rate (to the nearest millionths place) for January 14 (90 days in the quarter) on this account is:

Answer 1

Explanation:

To calculate the daily interest rate for January 14th on this account, we need to know the annual interest rate, as well as the number of days in the year.

If Franklin Credit Union pays 5% interest, compounded daily, that means the annual interest rate is 5%. To find the daily interest rate, we need to divide the annual interest rate by the number of days in the year.

Since we're interested in the interest rate for January 14th, which is in the first quarter of the year, we can assume a 90-day quarter.

So the daily interest rate is:

5% / 90 = 0.055555...

Rounding to the nearest millionths place gives us:

0.055556

Therefore, the daily interest rate for January 14th on this account is approximately 0.055556.