asked 130k views
2 votes
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 $\$1,\!000$ 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

asked
User Glaslos
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7.7k points

1 Answer

5 votes

Final answer:

After three years, Jillian's ending balance in her savings account, considering all deposits, monthly fees for the first 10 months, and a 1% annual interest rate awarded at the end of each year, will be $3,535.

Step-by-step explanation:

Let's calculate the ending balance in Jillian's account after three years, considering a monthly deposit and account fees. Jillian deposits $100 each month into the savings account. The account charges a $10 monthly fee if the ending balance isn't $1,000 or higher. After three years, including the awarded interest at a 1% annual rate, the final balance must be determined.

For the first 10 months, each $100 deposit is reduced by a $10 fee, effectively depositing $90 per month. Starting from month 11, there's no fee since the balance exceeds $1,000 with the deposit made at the beginning of the month (($90 x 10) + $100 > $1,000).

First-year breakdown:

Months 1-10 deposit = $90 x 10 = $900

Months 11-12 deposit = $100 x 2 = $200

Total first-year deposits = $900 + $200 = $1,100

For the next two years, Jillian deposits $100 each month with no fees:

Yearly deposit without fees = $100 x 12 = $1,200

Total deposit for the next two years = $1,200 x 2 = $2,400

Calculating total balance before interest:

Total deposits over three years = $1,100 + $2,400 = $3,500

Applying the 1% annual interest on the final balance and rounding to the nearest dollar:

Interest earned = 1% of $3,500 = $35

Ending balance after interest = $3,500 + $35 = $3,535

Thus, after three years, Jillian's ending balance after interest is $3,535.

answered
User Ben Kilah
by
8.1k points
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