Question

Henry savings account has an APR of 3.65 percent, calculate interest daily, and pays interest at the end of the month. If during the month November, his balance was $300 for the first 10 days of the month, $1200 for the next 10 days of the month and $800 for the last 10 days of the month how much total interest did Henry earn in November

Answer 1

APR is the annual percentage rate. To get daily percentage rate, we need to divide APR by 365. We have,

daily rate =
`3.65/365=0.01` (in percentage). In decimal it is
`(0.01)/(100)=0.0001`.

To get total interest, we calculate it accordingly:

• For first 10 days, he gets daily interest of 0.01% on $300:

`300*10*0.0001=0.3`

• For next 10 days, he gets daily interest of 0.02% on $1500:

`1200*10*0.0001=1.2`

• For the last 10 days, he gets daily interest of 0.02% on $600:

`800*10*0.0001=0.8`

Henry's total interest is the sum of these three,

`0.3+1.2+0.8=2.3` dollars.

ANSWER: $2.3