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It's January 1st, and Jillian is starting a new savings plan. Her savings account charges a $10 monthly fee for any month where she does not have an ending balance of $1000 or higher. At the beginning of each month, she deposits $100 into her account. At the end of the year, her bank awards her an interest at the rate of 1%, rounded to the nearest dollar, calculated on the ending balance.

After three years, what is her ending balance after interest?

 Dec 15, 2018

For the first 11 months, she is effectively depositing [ 100 - 10] = $90 per month into her account because of the service charge being applied every month

So...at the end of 11th month, she has  11 * 90   =  $990 in her account


At the start of the 12th month she deposits $100 into her account and now has $1090 in her account.....so....she will not  have to pay the $10 service charge any longer


The account balance at the end of the first year is :   1090 (1.01) = $1100.90 = $1101


At the end of the second year   the account balance is


[ 1101 + 12(100)]*(1.01)   = $2324.01 =  $2324


At the end of the third year, the account balance is


[ 2324 + 12(100) ] (1.01)  = $3559.24  =  $3559




cool cool cool

 Dec 15, 2018

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