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$2,310 deposited April 12 and withdrawn July 5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

Principal Amount = P = $2310
Interest rate = r = 3.5% = 0.035
Compounding periods in a year = n = 365
Time in days = Number of days from April 12 to July 5 = 84
Time in years= t = 84/365
Interest Earned = ?

First we find the compounded amount A.

$A=P(1+ \frac{r}{n})^{t*n} \\ \\ A=2310(1+ \frac{0.035}{365})^{365* \frac{84}{365} } \\ \\ A = 2328.68$

Therefore, the amount accumulated over the given period will be $2328.68

Interest Earned = Amount compounded - Principal Amount
Interest Earned = 2328.68 - 2310 = $18.68

Therefore, the interest earned from April 12 to July 5 will be $18.68