Question

On June 10, Bertha Wooten deposited $8,241.78 in a savings account that pays 5.5% interest compounded
daily. How much interest will the money earn in 31 days?

Answer 1

The amount of interest that Bertha Wooten's deposit will earn in 31 days is $38.59, which is the difference between the future value and the present value.

What is the future value?

The future value represents the amount that will be in the account after the present value investment is compounded at an interest rate periodically.

The future value of an investment can be calculated using the future value formula, A = P (1 + i)^n.

Where:

A = future value

P = Present value of investment

i = interest rate

n = number of periods.

The future value of the investment can also be determined using an online finance calculator, as follows.

Then the interest is the difference between the future value and the present value.

Data and Calculations:

Initial deposit = $8,241.78

Interest rate = 5.5% compounded daily

Investment period = 31 days

N (# of periods) = 31 days

I/Y (Interest per year) = 5.5%

PV (Present Value) = $8,241.78

PMT (Periodic Payment) = $0

Results:

FV = $8,280.37

Total Interest $38.59 ($8,280.37 - $8,241.78)

Thus, the amount of interest that Bertha Wooten's deposit will earn in 31 days is $38.59.

Learn more about determining the amount of interest at https://brainly.com/question/2151013

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