Question

Suppose you invest $2000 at a 5% annual interest rate. calculate the amount you would have after 7 years:

a) daily
b) monthly
c) continuously

Answer 1

Daily: .27 a day

Monthly: 8.33 a month

Annually: 100 a year

Explanation:

5% of 2000 is 100. That is your annual rate.

100 annually

100/12 = 8.33 (monthly)

100/365 = .27 (daily)