Question

On January 4, janelle ruskinoff deposited $2192.06 in a savings account that pays 5.5 percent interest compounded daily. How much will her money earn her in 24 days

Answer 1

$7.94

Explanation:

We have been given that on January 4, Janelle Ruskinoff deposited $2192.06 in a savings account that pays 5.5 percent interest compounded daily. We are asked to find the amount of interest earned in 24 days.

We will use compound interest formula to solve our given problem.

`A=P(1+(r)/(n))^(nt)`, where,

A = Final amount after t years,

r = Annual interest rate in decimal form,

n = Number of times interest is compounded per year,

t = time in years.

24 days in years would be
`(24)/(365)`.

`r=(5.5)/(100)=0.055`

Upon substituting our given values in above formula, we will get:

`A=2192.06(1+(0.055)/(365))^{365*(24)/(365)}`

`A=2192.06(1+0.0001506849315068)^(24)`

`A=2192.06(1.0001506849315068)^(24)`

`A=2192.06(1.0036227121284570884)`

`A=2200.001202348`

To find amount of interest earned, we will subtract principal amount from final amount as:

`I=A-P`

`I=2200.001202348-2192.06`

`I=7.941202348`

`I\approx 7.94`

Therefore, her money will earn approximately $7.94 in 24 days.