Question

Maurice Luken deposited $3,021 in a savings account that paid 5.5 percent interest

compounded daily. How much interest did he earn in 31 days?

Answer 1

9514 1404 393

Answer:

$14.14

Explanation:

The amount of interest earned is ...

I = P((1 +r/365)^n -1) . . . . interest on principal P at annual rate r compounded daily for n days

I = 3021(1 +0.055/365)^31 -1) ≈ 14.14

$14.14 in interest is earned in 31 days.