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

Question

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

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Lydia 1 month 2021-09-08T02:37:46+00:00 1 Answer 0

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    2021-09-08T02:39:11+00:00

    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

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