A bank offers a 7.75% annual interest rate compounded daily. The periodic interest rate is

To calculate the periodic interest rate, we need to know the compounding frequency. In this case, the bank compounds the interest daily, meaning it calculates and adds interest to the account balance every day.

The formula to calculate the periodic interest rate is:

Periodic Interest Rate = (1 + Annual Interest Rate / Compounding Frequency)^(Compounding Frequency / Total Number of Periods) - 1

In this case, the annual interest rate is 7.75%, and the compounding frequency is daily. We will assume a total number of periods as 1 year.

Using this information, let's calculate the periodic interest rate:

Periodic Interest Rate = (1 + 0.0775 / 365)^(365 / 1) - 1

Calculating this expression:

Periodic Interest Rate = (1 + 0.0002126)^365 - 1

Periodic Interest Rate ≈ (1.0002126)^365 - 1

Periodic Interest Rate ≈ 0.0803

Therefore, the periodic interest rate for this bank, compounded daily, is approximately 0.0803 or 8.03%.