Question

In October, the accountant noticed a discrepancy in the amount of $16,300 on Hutton Financial’s savings account holdings. The last statement for September showed Hutton Financial at $368,577.27. After bringing this discrepancy to the attention of the CFO at Hutton Financial an investigation was initiated. In February, the missing $16,300 was credited back to the account. However, due to the discrepancy the savings account missed accumulating the appropriate .10% interest at the end of those months. Calculate the interest that the bank should credit the accounts until the discrepancy was resolved.

Answer 1

Calculation of Interest Amount

Rate of Interest = 10%

Amount of discrepancy = $16300

Assumption :- a) Discrepancy was resolved on 28th February

b) Amount was required to be credited in bank on 30th september but not get credited on that date

Interest Period = From 30th september to 28th february = 151 days

Calculation of Interest = Discrepancy amount * rate * 151/365

Interest amount = $16300*10%*151/365

Interest = $674.33