Final answer:
To calculate the difference in the amount of money earned in three years compounded daily at 1.33% compared to compounded semiannually at 1.33%, we can use the formula for compound interest: A = P(1 + r/n)^(nt). Substituting the values into the formula, we can calculate the amounts after three years and find the difference. The difference is approximately $11.47.
Step-by-step explanation:
To calculate the difference in the amount of money earned in three years compounded daily at 1.33% compared to compounded semiannually at 1.33%, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
- For daily compounding, the principal (P) is $10,000, the annual interest rate (r) is 1.33%, and the compounding frequency (n) is 365 times a year.
- For semiannual compounding, the principal (P) is also $10,000, the annual interest rate (r) is still 1.33%, and the compounding frequency (n) is 2 times a year.
Substituting the values into the formula, we can calculate the amounts after three years and find the difference.
Using the formula, the amount after three years with daily compounding is approximately $10,460.00, while with semiannual compounding, it is approximately $10,448.53. Therefore, the difference is approximately $11.47.