Question

St. Francis Bank pays 4% interest, compounded daily, from the date of deposit to the date of withdrawal. The daily interest rate (to the nearest milionths' place)

for October 14 (92 days in the quarter) on this account is:
0.000109.
0.000112
0.000098.

Answer 1

The daily interest rate on this account = 0.000109

Explanation:

Given that,

Interest rate = 4% compounded daily

i.e

Interest is 4% per annum and it is compounded daily.

Now,

We know , 1 year = 365 days

and 1 year interest rate = 4% =
`(4)/(100)` = 0.04

So,

The daily interest rate =
`(0.04)/(365)` = 0.000109

∴ we get

The daily interest rate on this account = 0.000109