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Question

Seamus Keane made a $600 deposit on April 1st to Mac- O- Bank. The bank pays an annual rate of 2.6% compounded quarterly on the first day of January, April, July, and October. On July 1, Seamus deposited $200 more to his account. He made no other deposits or withdrawls. Find his balance on October 1

Answer 1

A = p ( 1 + r/n ) ^nt, where A = ending amount, p = principal, r = rate, n = number of calculations, t = time in years.

 

For your question: p = 600, r = 0.26, n = 4 (quarterly), t = 0.5 (it is in only half a year)

 

A = 600 ( 1 + 0.26/4 )^4(0.5)

A = 600 ( 1.0625)²

A = 600 ( 1.134 )

A = 680.54

 

To this he added 200, so he has 880.54 on the first of October.