Question

Glacier State Bank pays 6% interest, compounded daily. After finding the daily interest rate (to the nearest millionths place) for September 5 (92 days in quarter), calculate the interest earned on that date for an account with a balance of $4,000 (to the nearest whole cent).
56 cents
48 cents
75 cents
65 cents
None of these choices are correct.

Answer 1

What are you thinking the answer might be?

Answer 2

I think the phrasing of this question is rather confusing.

6% compounded daily might be asking us to reflect on the fact that there are about 365 days in a year.

let's convert 6% to a decimal first = 0.06

now if we divide this by 365 days in a year:
0.06 divided by 365 = 0.000164383562

the question asks to round to the nearest millionths place for the above decimal. if you are confused on how to do that, leave a comment to let me know.

Answer 3

then multiply that decimal by 4000 to get your multiple choice answer