Question

Trevor Williams’ bank calculates interest daily. At an APR of 3%, how much simple interest does $2,000 earn in twelve days?

Answer 1

The answer is $1.97. 

Answer 2

To calculate Trevors' interest amount in twelve days use the following formula

Prt = I

Principal = $2,000

Rate = 0.03

Time = 12/365

Interest = ?

($2,000)(0.03)(12/365) = I

I = $1.97