10. Suppose on January 1 you deposit $200 in an account that pays a quoted interest...

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10. Suppose on January 1 you deposit $200 in an account that pays a quoted interest rate of 11.33% (APR), with interest added

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Answer 1

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Answer -

Amount deposited = $ 200

interest rate = 11.33 % with daily compounding
Number of days = 273

The total amount after daily compounding = $ 200 x e ^rxt
r = interest rate = 11.33 % = 0.1133
t = 273 /365 = 0.7479
r x t = 0.1133 x 0.7479 = 0.08474

Therefore

Amount = $ 200 x e ^0.08474
e = 2.71828
Amount = $ 200 x (2.71828) ^0.08474
Amount = $ 200 x 1.08843
Amount = $ 217.69
total interest amount will be = $ 217.69 - $ 200 = 17.69
The total amount on October 1 st = $ 217.69

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