Case Study: Population Modeling: Quiz
Problem 3
Banks typically convert the stated annual percentage rate of interest earned into a daily rate, equal to 1/365 of the annual rate. Suppose an account with a starting balance of $100 earns annual interest of 4%. What would be the balance at the end of the year if the interest is compounded daily?
Answers, problem 3
Balance at the end of the year = 100(1 + 0.04/365)365 = $104.08