Question

on june 1 Mary Barkley deposited 1000 in a savings account that pays 5.5 percent interest compounded daily. on june 26th, how much interest had been earned on the principal in her account?

Answer 1

9514 1404 393

Answer:

3.77

Explanation:

For daily compounding, the balance is ...

A = P(1 +r/365)^n . . . . principal P invested at annual rate r for n days

A = 1000(1 +0.055/365)^25 ≈ 1003.77

Of this amount, 1000 is the original principal. The difference is the interest.

The interest earned is 3.77.