What we have so far: INITIAL CASH AMOUNT IN THE BANK: USD3,000 ANNUAL INCREASE OF THE CASH AMOUNT IN THE BANK: 10% YEARS THE CASH STAYED IN THE BANK: 2 years. AMOUNT WITHDRAWN AT THE END OF YEAR 1: USD1,206 AMOUNT WITHDRAWN AT THE END OF YEAR 2: USD1,206
First, we need to solve for YEAR 1: FOR YEAR 1: Initial Deposit * Annual Increase Rate = Annual Increase 3,000 * 0.10 = Year 1's Annual Increase Year 1's Annual Increase = USD300 ∴The YEAR 1'S ANNUAL INCREASE IS USD300. ∴The NEW AMOUNT is now USD3,300.
BUT NOT SO FAST! After the year, you took out USD1,206. New Amount - USD1,206 = Year 1 Amount 3,300 - 1,206 = Year 1 Amount Year 1 Amount = USD2094 ∴The YEAR 1 AMOUNT which will carry over to YEAR 2 is USD2094.
Now, let us solve for the REMAINING BALANCE. FOR YEAR 2's Annual Increase: YEAR 1 AMOUNT * Annual Increase = Year 2's Annual Increase 2094*0.10 = Year 2's Annual Increase Year 2's Annual Increase = USD209.4 ∴The YEAR 1'S ANNUAL INCREASE IS USD209.4. ∴The NEW AMOUNT is now USD2,303.4.
But you took out USD1,206 USD2,303.4 - USD1,206 = Remaining Balance Remaining Balance = USD1097.4
