QQuestionMathematics
QuestionMathematics
"What is the compound interest on $2,500 at 6.75% compounded daily for 20 days?"
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Answer
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Step 1
r\_{daily} = \frac{6.75\%}{365} = 0.01851851852
First, we need to find the daily interest rate. We do this by dividing the annual interest rate by the number of days in a year:
Step 2
A = 2500 \left(1 + \frac{0.0675}{365}\right)^{365 \times 20/3
Next, we need to calculate the amount of interest earned during the 20 -day period. To do this, we use the formula for compound interest: Where: - A is the final amount - P is the principal ($2,500) - r is the annual interest rate (6.75%) - n is the number of times interest is compounded per year (daily, in this case) - t is the number of years In our case, n = 365 (compounded daily) and t = 20 / 365 (20 days). Plugging these values into the formula, we get:
Final Answer
A = 2500 \left(1 + \frac{0.0675}{365}\right)^{365 \times 20 / 3
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