Complete 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.
Part I: What interest rate does Cooper's savings account pay per day?
Part II: How much did Cooper earn in interest during the first 11 days of September?
Answer:
0.01% ; $6.27
Explanation:
Given :
Annual percentage interest (APR) = 3.65%
To obtain the daily interest :
APR / Number of days in a year
3.65% / 365
0.0365 / 365
= 0.0001
= 0.0001 * 100
= 0.01%
B.) Interest earned during first 11 days :
Using the relation :
Interest earned = Principal * Rate * Time
Principal = $5700 ; daily rate = 0.0001 ; number of days = 11
Interest earned = (5700 * 0.0001 * 11)
Interest earned = $6.27