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Business Mathematics Brief 12th Edition by Stanley Salzman ,Gary Clendenen, Charles Miller
Edition 12ISBN: 978-0132605540Business Mathematics Brief 12th Edition by Stanley Salzman ,Gary Clendenen, Charles Miller
Edition 12ISBN: 978-0132605540 Exercise 46
Find the interest earned by the following. Assume
interest compounded daily. (See Examples.)
Finding Daily Interest
Becky Gonzales received $12,500 from a divorce settlement. She plans to use the money for a down payment on a new Toyota Camry but decides to wait 60 days until the new models are out. She puts her money in a savings account earning 3 ½%, interest compounded daily for the 60 days. Find the amount of interest she will earn.
Solution
The table value for 60 days is 1.005769730.
The additional $72.12 isn't much money to Gonzales, but she is happy to earn some interest.
Finding Interest on Multiple Deposits
Tom Blackmore is a private investigator who keeps his extra cash in a savings account to earn interest. On January 10, he deposited $2463 in a savings account paying
compounded daily. He deposited an additional $1320 on February 18 and $840 on March 3. Find the interest earned through April 10.
Solution
Treat each deposit separately. The $2463 was in the account for 90 days (21 days in January, 28 days in February, 31 days in March, and 10 days in April). The value for 90 days from the table is 1.008667067.
The $1320 deposited on February 18 was in the account for 51 days (10 days in February, 31 days in March, and 10 days in April).
The $840 was in the account for 38 days (28 days in March and 10 days in April).
The total amount in the account on April 10 is found by adding the three compound amounts.
The preceding information is summarized in this table.
The interest earned is the total amount in the account less the deposits.
Finding Interest for the Quarter
Beth Gardner owns Blacktop Paving, Inc. She needs a place to keep extra cash, a place that will earn interest but that will allow her to get funds when needed. She opened a money market account on July 20 with a $24,800 deposit. She then withdrew $3800 on August 29 for an unexpected truck repair, and she made another withdrawal of $8200 on September 29 for payroll. Find the interest earned through October 1, given interest at 3 1 2 , compounded daily.
Quick TIP
See Appendix C for financial calculator solutions that do not require the use of a table.
Solution
Of the original $24,800, a total of $24,800 ? $3800 ? $8200 = $12,800 earned interest from July 20 to October 1 or for 274 ? 201 = 73 days. Find the factor 1.007024219 from the table.
The withdrawn $3800 earned interest from July 20 to August 29 or for 241 ? 201 = 40 days.
Finally, the withdrawn $8200 earned interest from July 20 to September 29 or for 272 ? 201 = 71 days.
The total interest earned is ($89.91 + $14.60 + $56.02) = $160.53. The total in the account on October 1 is found as follows.
The following information assumes that all interest is credited on the last day of the quarter.
interest compounded daily. (See Examples.) Finding Daily Interest
Becky Gonzales received $12,500 from a divorce settlement. She plans to use the money for a down payment on a new Toyota Camry but decides to wait 60 days until the new models are out. She puts her money in a savings account earning 3 ½%, interest compounded daily for the 60 days. Find the amount of interest she will earn.
Solution
The table value for 60 days is 1.005769730.
The additional $72.12 isn't much money to Gonzales, but she is happy to earn some interest.
Finding Interest on Multiple Deposits
Tom Blackmore is a private investigator who keeps his extra cash in a savings account to earn interest. On January 10, he deposited $2463 in a savings account paying
compounded daily. He deposited an additional $1320 on February 18 and $840 on March 3. Find the interest earned through April 10.Solution
Treat each deposit separately. The $2463 was in the account for 90 days (21 days in January, 28 days in February, 31 days in March, and 10 days in April). The value for 90 days from the table is 1.008667067.
The $1320 deposited on February 18 was in the account for 51 days (10 days in February, 31 days in March, and 10 days in April).
The $840 was in the account for 38 days (28 days in March and 10 days in April).
The total amount in the account on April 10 is found by adding the three compound amounts.
The preceding information is summarized in this table.
The interest earned is the total amount in the account less the deposits.
Finding Interest for the Quarter
Beth Gardner owns Blacktop Paving, Inc. She needs a place to keep extra cash, a place that will earn interest but that will allow her to get funds when needed. She opened a money market account on July 20 with a $24,800 deposit. She then withdrew $3800 on August 29 for an unexpected truck repair, and she made another withdrawal of $8200 on September 29 for payroll. Find the interest earned through October 1, given interest at 3 1 2 , compounded daily.
Quick TIP
See Appendix C for financial calculator solutions that do not require the use of a table.
Solution
Of the original $24,800, a total of $24,800 ? $3800 ? $8200 = $12,800 earned interest from July 20 to October 1 or for 274 ? 201 = 73 days. Find the factor 1.007024219 from the table.
The withdrawn $3800 earned interest from July 20 to August 29 or for 241 ? 201 = 40 days.
Finally, the withdrawn $8200 earned interest from July 20 to September 29 or for 272 ? 201 = 71 days.
The total interest earned is ($89.91 + $14.60 + $56.02) = $160.53. The total in the account on October 1 is found as follows.
The following information assumes that all interest is credited on the last day of the quarter.
Explanation
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Suppose 
interest compounded daily.
The...
Business Mathematics Brief 12th Edition by Stanley Salzman ,Gary Clendenen, Charles Miller
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