Question

Jeff deposits $2,300 at 1.13% interest compounded weekly. What will be his ending balance after one year?

Answer 1

$5326.135 will be his ending balance after one year.

Solution:

Deposited amount = $2,300

Rate of interest = 1.13% per week

$A=P\left(1+\frac{r}{n}\right)^{n t}$

where A = final amount  

P = principal = 2300

r = interest rate  = $1.13\%=\frac{1.13}{100}=0.0113$

n = number of times interest applied per time period  = 52 week

(1 year has 52 weeks)

t = number of time periods elapsed = 1 year

On substituting the values we get,

$Amount=2300 \times\left(1+\frac{0.0113}{52}\right)^{52}$

$\Rightarrow2300\times(\frac{52+0.0113}{52})^{52}\rightarrow2300\times(\frac{52.0113}{52})^{52}\rightarrow2300\times(1.000217)^{52}$

On solving we get, $\Rightarrow5326.135$

Therefore, the amount is $5326.135.