



 
Hi Kimberly. The 5.05% is the annual percentage rate. So each day, you earn 5.05%/365 = 0.013836% interest on your balance. That means that you multiply the previous balance by 1+0.00013836 to get the new balance. Balance at end of day 1: $2000 * 1.0001386 In fact, you can see that this gives us the general formula for compound interest: B = P * (1 + R/F)^{T*F} Notice that when the value is credited to your account doesn't factor into what you earn. Hope this helps,  


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