Originally posted by ittony
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One days interest on 1000 pounds at 4% is
0.10958904109589041095890410958904
and 2 days is:
0.21917808219178082191780821917808 (note this is twice 1 day's interest)
Your equation generates:
0.10745978202790255193483447623945
and 2 days
0.21493111166055858819796605301335 (which is not twice 1 days.)
Bank interest IS NOT compounded daily, which is what your equation calculates.
tim
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