Question

Henry's savings account has an APR of 3.65%, calculates interest daily, and

pays interest at the end of the month. If during the month of 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

To calculate the total interest earned by Henry in November, we need to calculate the interest earned on each of the three balances and then add them up.

First, we need to calculate the daily interest rate:

Daily interest rate = APR / 365 = 0.0365 / 365 = 0.0001

For the first 10 days, the interest earned on $300 is:

Interest = Principal x Daily interest rate x Time
Time = 10 days
Interest = 300 x 0.0001 x 10 = $0.30

For the next 10 days, the interest earned on $1200 is:

Interest = Principal x Daily interest rate x Time
Time = 10 days
Interest = 1200 x 0.0001 x 10 = $1.20

For the last 10 days, the interest earned on $800 is:

Interest = Principal x Daily interest rate x Time
Time = 10 days
Interest = 800 x 0.0001 x 10 = $0.80

Therefore, the total interest earned by Henry in November is:

Total interest = $0.30 + $1.20 + $0.80 = $2.30

Therefore, Henry earned $2.30 interest in November.