Question

On February 1, the balance in your account is $489.86. On June 1, you deposit $396.10. Your bank pays 6.0% interest that is calculated on the last day of the month. What is the amount in your account on June 1, after your deposit?

Answer 1

EXPLANATION

Let's see the facts:

Balance = $489.86

June 1 deposit = $396.10

Interest rate [last day of the month]= 6.0%

As we already know, the interest rate formula will be given as:

`\text{Amount = Initial }(1+(r)/(n))^(nt)`

So, we need to replace the given values in the equation:

`\text{Amount = 489.86 (1+}\frac{\text{0.06}}{12})^{12\cdot(1)/(3)}`

Amount = 489.86 * (1.020) = 499.73

Now, adding the deposit made on June 1, this will give us:

Final amount= $499.73 + $396.10 = $895.83

The amount in account on June 1 is equal to $895.83.