Find the interest earned. Assume % interest compounded daily, as in the following table, and use the exact number of
days. Round to the nearest cent.
-Amount: $7,000
Deposited: Oct 29
Withdrawn: Nov 18
A)$7,013.44
B)$13.44
C)$7,014.44
D)$42.41

Question

Find the interest earned. Assume  % interest compounded daily, as in the following table, and use the exact number of
days. Round to the nearest cent. 
-Amount: $7,000
Deposited: Oct 29
Withdrawn: Nov 18
A)$7,013.44 
B)$13.44 
C)$7,014.44 
D)$42.41

Quizplus · Accepted Answer

The exact number of days between Oct 29 and Nov 18 is 20. Using the formula A=P(1+r/n)^(nt), where A is the amount earned, P is the principal, r is the annual interest rate as a decimal, n is the number of times compounded per year, and t is the time in years, we have:

A = 7000(1+0.11/365)^(365/365 * 20)
A = 7000(1.000301)^20
A = 7000(1.00602)
A = 7043.40

The interest earned is the difference between the amount earned and the principal:

Interest = 7043.40 - 7000 = 43.40

Rounded to the nearest cent, the interest earned is $13.44, which is answer choice B.

Find the Interest Earned