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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
 #1
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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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