A savings account was opened with an initial deposit and never touched again. An account that does not meet the minimum
balance requirement is charged a service fee.
Assuming the account was open with an initial deposit below the minimum amount, the current account balance, B, is equal to the
product of the initial deposit, I, and the quantity of the difference of 1 and the monthly service fee, f, raised to the power of n, the
number of months since the account was open.
If an initial deposit of $2,586,00 is made to the account with a monthly service fee of 2% what will be the value of B after
19 months? Round to the nearest cent.
A.
$1,797.62
B. $1,603.32
C. $1,761.67
D. $3,767.31