1. Interest - Bearing Bank Accounts and Inflation
Section 10.2
Interest - Bearing Bank Accounts and Inflation

2. Find Interest Compounded DAILY
Use tables on P 411 and 412 …
The four quarters in a year begin on Jan 1, April 1, July 1, and Oct 1. Assume each is 90 days.
If working with less than a 90-day quarter, use the large table on p 412.
Cmpnd Amt = Principal x # from table
Interest = Compound Amt - Principal

3. Find the interest if $1200 is invested in a money market account earning 3.5% compounded daily for 90 days.
A money market account is opened with a deposit of $8500 on April 10, and another $1500 is deposited on May 5. Find the total in the account on June 30 if the funds earn 3 ½ % compounded daily. Also find the interest earned.

4. An account is opened with a deposit of $4000, but $3000 is withdrawn 40 days later. Find the amount in the account and the interest earned at the end of 90 days from the original deposit if 3 ½ % interest is compounded daily.
How much interest would there have been if the $3000 wasn’t withdrawn?

5. Time Deposit Accounts A.K.A. – CD (Certificate of Deposit)
Banks offer higher interest rates on amounts left for longer periods of time.
Use table on P 414
Compound = Principal x # from
Amount table

6. Find the compound amount and interest on $10,000 invested in a 4- year CD earning 6% compounded daily.