The cash balance in Roger\'s account with his stockbroker earns interest on the

ID: 2660373 • Letter: T

Question

The cash balance in Roger's account with his stockbroker earns interest on the daily balance at 4% per annum payable on June 30 and December 31. His cash balance on January 1 was $3347. As a result of the purchase or sale of securities from time to time, the balance changed to $8687 on March 4, to $2568 om May 24, and to $5923 on June 17. What interest was credited to Roger's account on June 30 ? The brokerage firm includes interest for both January 1 and June 30 in the June 30 payment. Assume that Febuary has 28 days

Explanation / Answer

DATE

BALANCE

NO. OF DAYS

INTEREST

JANUARY -1 TO MARCH-3

3347

31+28+3

=62 DAYS

3347*(62/365)*4%

=22.74

MARCH-4 TO MAY-23

8687

28+30+23

=81 DAYS

8687*(81/365)*4%

=77.11

MAY-24 TO JUNE 16

2568

8+16

= 24 DAYS

2568*(24/365)*4%

=6.75

JUNE 17 TO JUNE 30

5923

14 DAYS

5923*(14/365)*4%

=9.09

INTERST TO BE CREDITED TO ROGER ACCOUNT ON JUNE 30

$115.69 [TOTAL]