Question

Carlos invested $6,000 in a money market mutual fund that pays interest on a daily basis. The balance in his account at the end of 8 mo (245 days) was $6,230.23. Find the effective rate at which Carlos's account earned interest over this period (assume a 365-day year). (Round your answer to two decimal places.)

Answer 1

i - decimal interest rate per day

6230.23 = 6000(1+i)^245
1.0383717 = (1+i)^245
log 1.0383717 = 245 log (1+i)
log (1+i) = .0163528/245
1+i = 1.0001537
(1+i)^365 = 1.0577
so you make 5.78% per year

Answer 2

i put 5.78% and it says it's wrong.