Question

The beginning balance of Cooper's savings account for the month of September was $5700, and it remained this way for the first 11 days of the month. On September 12, Cooper made a withdrawal of $900, so his balance changed, and it remained the same for a total of 9 days. On September 20, Cooper made a deposit of $1100, so his balance changed again, and it remained the same for a total of 10 days to finish out the month. Cooper's savings account has an APR of 3.65%, calculates interest daily, and pays interest at the end of the month. Cooper wants to calculate the amount he earned in interest during the month of September. (5 points: Part I – 1 point; Part II – 1 point; Part III – 1 point; Part IV – 1 point; Part V – 1 point)

Part I: What interest rate does Cooper's savings account pay per day?

Daily interest rate: 0.01%



Part II: How much did Cooper earn in interest during the first 11 days of September?

Interest earned after 11 days: $6.27


Part III: How much did Cooper earn in interest during the next 9 days of September?





Part IV: How much did Cooper earn in interest during the last 10 days of September?



Part V: How much did Cooper earn in interest during the month of September?

Answer 1

To calculate the interest earned, we need to determine the balance at the end of each period and then calculate the interest based on the daily interest rate.

Step-by-step explanation:

To calculate the interest earned, we need to determine the balance at the end of each period and then calculate the interest based on the daily interest rate.

Part III: To calculate the interest earned during the next 9 days, we need to find the balance after 11 days, subtract the withdrawal made on September 12, and then calculate the interest based on the daily interest rate.

Part IV: To calculate the interest earned during the last 10 days, we need to find the balance after 20 days, subtract the deposit made on September 20, and then calculate the interest based on the daily interest rate.

Part V: To calculate the total interest earned during the month of September, we need to add the interest earned during the first 11 days, the interest earned during the next 9 days, and the interest earned during the last 10 days.