Question

Clara's savings account has an APR of 10.95% calculates interest daily and pays interest at the end of the month if during the month of september her balance was $700 for the first 10 days of the month, $1900 for the next 10 days of the month, and $1400 for the last 10 days of the month, how much total interest did clara earn in september

A. $12.78
B. $11.20
C. $12.00
D. $11.30

Answer 1

The correct option is C. $12.00

Explanation:

Annual Principal Rate = 10.95%

= 0.1095

Time duration = 10 days

`\text{Time duration in years =}(10)/(365)=0.027\:\:years`

First finding interest rate for $700

Interest = 700 × 0.1095 × 0.027

= $2.10

Now finding interest rate for $1900

Interest = 1900 × 0.1095 × 0.027

= $5.70

Then finding interest rate for $1400

Interest = 1400 × 0.1095 × 0.027

= $4.20

Total Interest paid = 2.10 + 5.70 + 4.20

= $12.00

Hence, The correct option is C. $12.00

Answer 2

Clara's average balance for the month was
.. (700*10 +1900*10 +1400*10)/30 = 1333.33

The interest paid on that balance was
.. 30/365*0.1095*$1333.33 = $12.00 . . . . . matches selection C