Question

Question 1: TimeValueOfMoneyPro110Alt1 An engineer in a developing country observes that his project bank account has grown from 1400000 to 1558869 (local currency units) in 15 days with no deposits or withdrawals being made. He knows that the account earns interest compounded daily. Question 1 What is the daily compound rate of interest earned on the account

Answer 1

Answer: 0.72%

Step-by-step explanation:

Using the Present value formula:

Present value = Future value / (1 + r)^n

Making r the subject of the formula makes the equation:

r = (Future value / Present value ) ^ 1/n - 1

= (1,558,869/ 1,400,000)¹/¹⁵ - 1

= 0.72%