Question

Central Bank pays 8.5% interest, compounded daily, from the date of deposit to the date of withdrawal. The daily interest rate (to the nearest millionths place) forJuly 28 (92 days in the quarter) on this account is:0.000198.0.0002070.000231.0.000216None of these choices are correct.

Answer 1

ofGiven the yearly interest rate as 8.5%

To find the daily interest, we will divide the yearly interest rate by 365 as shown below:

`\text{daily interest rate=}\frac{yearly\text{ interest rate}}{365}`

`\text{daily interest rate=}((8.5)/(100))/(365)=(0.085)/(365)=0.0002328767`

Hence, the daily interest rate (to the nearest millionths place)= 0.000232, The third option