SOLUTION: On march 20, Soren Kierkegaard deposited 1,000 into his savings account that pays 5.5% interest compounded daily. How much interest will the money earn by April 20?
Algebra ->
Customizable Word Problem Solvers
-> Finance
-> SOLUTION: On march 20, Soren Kierkegaard deposited 1,000 into his savings account that pays 5.5% interest compounded daily. How much interest will the money earn by April 20?
Log On
Question 1146328: On march 20, Soren Kierkegaard deposited 1,000 into his savings account that pays 5.5% interest compounded daily. How much interest will the money earn by April 20? Answer by greenestamps(13198) (Show Source):
The 5.5% (= 0.055) is the annual interest rate. For daily compound interest, a year is often considered 360 days; so the daily interest rate is 0.055/360.
March 20 to April 20 is 31 days, so the amount on April 20 will be
Use a calculator....
(You can of course use 0.055/365 -- or even 0.055/365.25 -- in that calculation if you want.)
