Question

5.
Find the interest earned. Assume 3.5% interest compounded daily.
$975 deposited April 23 and withdrawn June 18


$6.66

$5.25

$5.16

$6.75

Answer 1

Interest earned can be calculated using the following equation:

I = P{(1+r/n)^t-1}

Where, I = Interest earned, P = Amount deposited, r= Interest rate (annual) = 3.5% = 0.035, n = 365 days, t= time in days = 55 days (deposit and withdrawing days are not counted).

Therefore,
I = 975{(1+0.035/365)^55 -1 ) ≈ $5.16