Question

. I have $72,000 in my bank account today. The bank manager told me that I will have $100,000 money in five years if I keep the money in this account and don’t touch it (meaning that I won’t withdraw from it or don’t add more into it). The account pays me daily interest. What is the APR for my account

Answer 1

Answer: APR = 7.8%

Step-by-step explanation:

Initial money in account = $72000

After 5yrs it becomes $100,000

Interest in 5yrs = $100,000 - $72,000

= $28,000

Interest per year = $28,000/5 = $5600

APR = 5600/72000 x 100%

= 0.078 x100% = 7.8%