Question

(1 pt) On April 1, 1996 Francine opens a savings account paying 7 percent convertible quarterly with a deposit of 3900 dollars. On October 1, 1997, she withdraws 2500 dollars. On July 1, 1998, she deposits 2500 dollars. What is the account balance on January 1, 2000?
Answer = dollars.

Answer 1

Answer-

April 1st 1996 deposit amount = $ 3900

Inteeat rate = 7 % convrtible quarterly = 7 % / 4 = 1.75 % = 0.0175

On October 1st 1997 there are 6 quarters and the amount = $ 3900 x ( 1 + r )6

= $ 3900 x ( 1 + 0.0175)6

= $ 3900 x 1.01756

= $ 3900 x 1.1097

= $ 4327.83

Amount withdrawn on October 1st 1997 = $ 2500

Remaining amount on October 1st 1997 = $ 4327.83 - $ 2500 = $ 1827.83

The accumulated amount after 3 quarters on July 1st 1998 = $ 1827.83 x ( 1 + 0.0175)3

= $ 1827.83 x 1.01753

= $ 1827.83 x 1.053424

Amount on July 1st 1998 = $ 1925.48

Amount deposited on July 1st 1998 = $ 2500

Total amount on July 1st 1998 = $ 1925.48 + $ 2500 = $ 4425.48

The amount on 1st January 2000 ie after 6 quarters from July 1st 1998

= $ 4425.48 x ( 1 + 0.0175)6

= $ 4425.48 x 1.01756

= $ 4425.48 x 1.1097

= $ 4910.955

Therefore the account balance on 1st January 2000 = $ 4910.955