Question

For October, where the balance on 1 October was K4530 and there was a withdrawal of K500 on 1 October. Using this formula I= PrT/100, find the interest payable for the savings account that calculates interest onthe minimum daily balance at a rate 3% p.a.

Answer 1

K10.93

Answer 2

First, calculate the minimum daily balance after the withdrawal on 1 October:

Minimum Daily Balance = K4530 - K500 = K4030

Next, calculate the interest payable using the formula I= PrT/100, where:
P = minimum daily balance = K4030
r = interest rate = 3% = 0.03
T = time in years = 1 month/12 = 1/12 years

I = (4030 * 0.03 * 1/12) / 100
I = (120.9) / 100
I = K1.209

Therefore, the interest payable for the savings account for October is K1.209.

Answer 3

Apologies for the miscalculation. Let's correct the calculation:

I = (4030 * 0.03 * 1/12) / 100
I = (120.9) / 100
I = K1.209

Therefore, the interest payable for the savings account for October should be K1.21 instead of K10.93. Thank you for pointing out the error.