Question

If Dominion Bank also pays 3.25% annual interest, compounded daily. If you had the following deposits and withdrawals, calculate the amount of interst you would have earned at Dominoin bank during the month of March. (March has 31 days)DATE ACCOUNT ACTIVITY BALANCEMarch 1 beginning balance $6,500March 16 withdraw $1,500 ????March 28 deposit $700 ????

Answer 1

It would have earned 15.91 dollars of interest

Step-by-step explanation:

We will calcualte for compounding at each moment:

First, we will calculate for $6,500 for March 1st to March 15th:

Then, from March 16th to march 27th we calculate for $5,000 + accrued interest of the peri

and from March 28th to 31th we calcualte $5,700 + accrued interest

`Principal (1 + (r)/(m) )^(n * m) = Amount`

n = 15/365 days

m = 365

r = 0.0325

`6,500 (1 + (0.0325)/(365) )^(15/365 * 365) = Amount`

6508.69

Then we withdraw 1,500

And we calcualte for hte period marchth to March 27th for the currnet value: 5,008.69

`5,008.69 (1 + (0.0325)/(365) )^(11/365 * 365) = Amount`

Amount: 5,013.60

Then we deposit 700 and calcualte the rest of the month:

`5,713.60 (1 + (0.0325)/(365) )^(11/365 * 365) = Amount`

Amount: 5,715.64

We can now calcualtethe interest earned:

6,508.96 - 6,500 = 8.96

5,013.60 - 5,008.69 = 4.91

5,715.64 - 5,713.60 = 2.04

total interest = 15.91