\"You make the following deposits in a bank that earns 3% interest: 11/10/2017 $
ID: 1132834 • Letter: #
Question
"You make the following deposits in a bank that earns 3% interest:
11/10/2017 $1,019
01/22/2018 $4,169
05/09/2018 $504
10/31/2018 $1,777
01/11/2019 $738
07/27/2019 $2,193
You withdraw all the money at the end of 2020. How much money will you withdraw at the end of the year 2020? In your calculations, you should follow the convention that all deposits made during the year are lumped together at the end of the year. For example, any deposits made in January through December 30 can be considered as being deposited on December 31."
Explanation / Answer
As per the given list of deposits, the following table shows total deposits at the end of each year:
Assuming that interest is credit annually at 3% per annum, then, at the end of 2017, total amount after interest will be:
1019 + 0.03*1019 = 1.03*1019 = $1049.57
At the end of 2018, total deposit would be $1049.57 + $6450 = $7499.57 and the total amount after adding interest would be 1.03*7499.57 = $7693.07
Similarly, total deposit at the end of 2019 would be $7693.07 + $2931 = $10624.07 and the total amount after adding interest would be 1.03*10624.07 = $10712
Finally, interest will be credited for the entire amount $10712 at the end of the year 2020.
Thus, the amount which can be withdrawn at the end of 2020 will be 1.03*10712 = $10802.57
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