Question
How much less interest is earned at 6% simple interest for 5 years on a $10,000 investment than a 6% rate compounded daily for 5 years?
Answers
Reiny
Interest on simple intereat part
= PRT
= 10000(.06)(5) = $3000
at 6% per annum compounded daily
amount = 10000(1 + .06/365)1825 = 13498.25
or $3498.25 in interest
so for the simple interest there would $498.25 less than the rate compounded daily.
= PRT
= 10000(.06)(5) = $3000
at 6% per annum compounded daily
amount = 10000(1 + .06/365)1825 = 13498.25
or $3498.25 in interest
so for the simple interest there would $498.25 less than the rate compounded daily.