Question

Asia Desai deposited $6,000 in a savings account that pays 5.5% interest compounded daily. How much interest did she earn in 21 days?

Answer 1

21 days = 21/365 years = 0.0575342466 years
n = compounding periods per year = 365

Total = Principal * (1 + rate/n)^n*years
Total = $6,000 * (1+ (.055/365))^365*0.0575342466
Total = $6,000 * (1+ 0.0001506849 )^21
Total = $6,000 * 1.00316915570
Total = $6,019.01

Answer 2

Explanation:

that was the total wrong answer my guy... the answer would go like this.

6000 x (1 + 5.5%/365)^21 = $6,019.02

So interest was $19.02 (ignoring rounding, taxes, and assuming the use of 365 day years).