The ShortHolder bank pays 5.60% p.a., but with daily compounding assume a 360 day year), on...

The ShortHolder bank pays 5.60% p.a., but with daily compounding assume a 360 day year), on a 9 month certificate of deposit . If you deposit $20,000 you would expect to earn how much in interest (rounded to the nearest dollar).

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Expert Solution

Interest earned on certificate of deposit = Deposit * Interest rate per annum * Years

Deposit = 20000

Interest rate = 5.60%

Year = (9 * 30) / 360 = 0.75 years

Interest earned = 20000 * 5.6% * 0.75

= $840

Interest earned = 840

jeff jeffy answered 2 years ago

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