Homework Help: Math

Posted by Anonymous on Thursday, October 15, 2009 at 6:32pm.

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?

Math - Reiny, Thursday, October 15, 2009 at 7:10pm
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.

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