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?
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