If we borrowed $10,000 on a line of credit September 1, and the bank charges 12 percent per annum, compounded daily, the daily interest due on the line of credit is approximately
A) $0.03
B) $3.28.
C) $4.00.
D) $10.00.

Question

Quizplus · Accepted Answer

To calculate the daily interest due on a line of credit with an annual interest rate of 12 percent, compounded daily, you use the formula for daily compounding interest: $I = P \times \frac{r}{n}$, where $I$ is the interest, $P$ is the principal amount ($10,000), $r$ is the annual interest rate (12% or 0.12 as a decimal), and $n$ is the number of compounding periods per year (365 for daily). Thus, the daily interest is approximately $10,000 \times \frac{0.12}{365} = $3.28.

If We Borrowed $10,000 on a Line of Credit September