No More Pencils, Inc., disburses checks every two weeks that average $76,000 and
ID: 2653312 • Letter: N
Question
No More Pencils, Inc., disburses checks every two weeks that average $76,000 and take five days to clear. How much interest can the company earn annually if it delays transfer of funds from an interest-bearing account that pays 0.011 percent per day for these five days? Ignore the effects of compounding interest. (Round your answer to 2 decimal places. (e.g., 32.16))
No More Pencils, Inc., disburses checks every two weeks that average $76,000 and take five days to clear. How much interest can the company earn annually if it delays transfer of funds from an interest-bearing account that pays 0.011 percent per day for these five days? Ignore the effects of compounding interest. (Round your answer to 2 decimal places. (e.g., 32.16))
Explanation / Answer
The interest that the company could earn will be
the amount of the checks times the number of days it will delay payment times the number of weeks that checks will be disbursed times the daily interest rate,So :
Interest = $76,000 (5) (52/2) (0.00011)
Interest = $1086.80
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