# Interst Problem (Percent)

• Aug 22nd 2008, 09:34 PM
DonPatricio
Interst Problem (Percent)
OK, if I get a 4% APY for 6 months.
With how much money do I end up when starting off with 5 000 \$ after 6 months?
• Aug 23rd 2008, 05:49 AM
TKHunny
This question makes no sense at all. Please try again.

"I get a 4% APY for 6 months."
This is insufficient. You MUST specify the compounding methodology. Simple, compound, days, months, and on and on...

"With how much money do I end up when starting off with 5 000 \$ after 6 months?"

Ambiguous. Is the \$5000 at the beginning of the 6 months or at the end of the six months?
• Aug 23rd 2008, 10:41 AM
DonPatricio
It is compounded daily and yes you start off with 5000 \$.
thanks
• Aug 23rd 2008, 12:02 PM
mikeedla
think it out
first you need to figure out the daily interest rate
so if 4% a year than (4/365)% a day.

now you start off with 5000
and after day one with 4% APY you have 5000 * (100 + 4/365)%
then you times that by another (100+4/365)% everyday.
365/2 is the amount of days you decide on the rounding.
now that would take a long time to calculate so we will use algebra.

5000 * (100 + 4/365)% ^ (365/2)

see how useful exponents are!!!

I hope this helps
• Aug 23rd 2008, 01:12 PM
TKHunny
Quote:

Originally Posted by mikeedla
then you times that by

Please never say that again. (Worried)

Quote:

It is compounded daily and yes you start off with 5000 \$.
thanks
Barely a complete sentence. Please make an effort to communicate more effectively. I realise this is a Math Help site, but you need to be understood through language. One of the best ways to communicate is this simple sequence:

1) Include the COMPLETE problem statement, exactly as worded.
2) Show your work. You CAN'T have NO idea.

You still haven't specified the compounding method very well. Some use 365 days, others use 360 days. There are various other methods, as well.

Daily compounding of \$5000 over 6 months using 360 days and 30-day months is no problem:

(1 + 0.04/360)^(360/2)

Daily compounding of \$5000 over 6 months using 365 days and exact-day months is a bit trickier:

(1 + 0.04/365)^(181) From January or February, not a leap year.

(1 + 0.04/365)^(184) From March or May or Jul or Aug

(1 + 0.04/365)^(183) From April or Jun

(1 + 0.04/365)^(181) From September or November, next year not a leap year.

(1 + 0.04/365)^(182) From October or December, next year not a leap year.

See what I mean? You really need to specify EXACTLY what it is you are doing.