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Clara's savings account has an APR of 10.95% calculates interest daily and pays interest at the end of the month if during the month of september her balance was $700 for the first 10 days of the month, $1900 for the next 10 days of the month, and $1400 for the last 10 days of the month, how much total interest did clara earn in september
A. $12.78
B. $11.20
C. $12.00
D. $11.30

Respuesta :

sqdancefan
Clara's average balance for the month was
.. (700*10 +1900*10 +1400*10)/30 = 1333.33

The interest paid on that balance was
.. 30/365*0.1095*$1333.33 = $12.00 . . . . . matches selection C

Answer:  

The correct option is C. $12.00

Step-by-step explanation:

Annual Principal Rate = 10.95%

                                    = 0.1095

Time duration = 10 days

[tex]\text{Time duration in years =}\frac{10}{365}=0.027\:\:years[/tex]

First finding interest rate for $700

Interest = 700 × 0.1095 × 0.027

             = $2.10

Now finding interest rate for $1900

Interest = 1900 × 0.1095 × 0.027

             = $5.70

Then finding interest rate for $1400

Interest = 1400 × 0.1095 × 0.027

             = $4.20

Total Interest paid = 2.10 + 5.70 + 4.20

                                = $12.00

Hence, The correct option is C. $12.00

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