How is the daily balance method different from compounding interest daily?

a. Unlike daily compound interest, the daily balance method only applies charges at the end of the month.

b. The daily balance method rounds less frequently than daily compound interest.

c. The daily balance method checks your balance at the end of each day, but daily compound interest checks at the beginning of each day.

d. It is not different. The two processes are the same.

Question

Hanna Holland

Mathematics

10 July, 16:07

How is the daily balance method different from compounding interest daily?

a. Unlike daily compound interest, the daily balance method only applies charges at the end of the month.

b. The daily balance method rounds less frequently than daily compound interest.

c. The daily balance method checks your balance at the end of each day, but daily compound interest checks at the beginning of each day.

d. It is not different. The two processes are the same.

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Answers (1)

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Cash Ballard · Answer 1

Daily balance method is no different from daily compounding interest. Both of them checks the balance at the end of the day. Posting of interest is also done daily on both methods thus, the answer is letter d. The two processes are the same.