Quandaries and Queries
My question is: What would be the amount of interest charged or accrued and how is it calculated on principal balance of $209.12 @ 6% interest rate compounded daily for 70 days?
Thank you for your help!
Jeff
Secondary (10-12)
Student
Hi Jeff,
I expect that the 6% interest rate is 6% per year, and hence the daily interest rate is 0.06/365 = 0.00016438. To save myself some typing I am goint to call this r, that is r = 0.00016438.
On day 1 you borrow $209.12 and hence at the end of day 1 you owe
(1 + r)
(1 + r) and hence at the end of day 2 you owe
(1 + r)] (1 + r) = $209.12 (1 + r)2
(1 + r)2 and hence at the end of day 3 you owe
(1 + r)2] (1 + r) = $209.12 (1 + r)3