john lee's savings account has a balance of $139. after 9 months, what will the amount of interest be at 4.3% per year?
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M$3 Answers
Assuming Simple Interest,
Interest = Term * Interest rate * Amount
= 9/12 * 4.3/100 * 139 = $4.48
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M$
At first, I could see why the 1st answerer took it to be the latter, and how he/she guessed at the missing information, and I appreciated that effort. I also thought that answer #2 had made an equally good guess. However, the more I look at it, the more it appears that it was meant to be a period and the asker just failed to capitalize the next word.
But, I respect the effort by both answerers, and found them both helpful.
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M$a) we assume a year = 365 days
b) we assume non compound daily interest is paid
Therefore:
1. original sum was $134.65
2. value at 9mos $139.00
3. interest at 9mos $4.35
2. total value at 12 months $140.44
3. total interest paid at 12mos $5.79
If, however, interest is paid yearly then the value at 9mos was the same as the value at start:
1. original value $139.00
2. value at 9mos $139.00
2. value at 12mos $144.98
3. total interest paid at 12mos $5.98
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M$
Can you write a formula to show how you found these numbers:
"2. value at 9mos $139.00
3. interest at 9mos $4.35 " ?
That's what the asker probably wants.
"4.3% annual interest = 4.3/365 = 0.011780822% daily interest
daily interest% x 274 days (9mos) = 3.23% "
That's fine; however you probably started from January to September months while @runghen23 used 9/12 . So there will be a small difference of results
"$139.00/103.23*100 = $134.65
$139.00 - $134.65 = interest paid of $4.35 "
not really,
you have to calculate
$139*103.23/100=$143.4897
and then $143.49-$139=$4.4897
which is with just one formula, as @runghen23 pointed out,
4.3/100*274/365*139
Sure:
4.3% annual interest = 4.3/365 = 0.011780822% daily interest
daily interest% x 274 days (9mos) = 3.23%
$139.00/103.23*100 = $134.65
$139.00 - $134.65 = interest paid of $4.35
In other words, 9mos interest = (139/(((4.3/365)*274)+100)*100)-139.00
The poster should have specified if it's simple or compound interest.