Question

Monique borrows $5000 at 5.5% interest compounded daily for 29 days. How much will she owe at the end of 29 days?

Answer 1

Answer:

Step-by-step explanation:

We would apply the formula for determining compound interest which is expressed as

A = P(1+r/n)^nt

Where

A = total amount in the account at the end of t years

r represents the interest rate.

n represents the periodic interval at which it was compounded.

P represents the principal or initial amount borrowed

From the information given,

P = 5000

r = 9

5.5% = 5.5/100 = 0.055

Assuming they are 365 days in a year

n = 365 because it was compounded 52 times in a year.

t = 29/365 = 0.0794

Therefore,

A = 5000(1 + 0.055/365)^365 × 0.0794

A = 5000(1 + 0.00015)^29

A = 5000(1.00015)^29

A = $5022