Interactive practice questions
Mr Smith opened a bank account for his granddaughter Avril on the day she was born: January 5, 2006. He deposited $\$4000$$4000.
Mrs Smith, Avril’s grandmother, also deposited money into this account on that day, and continues to do so by depositing $\$400$$400 every $3$3 months.
The balance at the end of each quarter for this investment, where interest is compounded quarterly, is given by $A_n=1.03A_{n-1}+400$An=1.03An−1+400, $A_0=4400$A0=4400.
State the quarterly interest rate.
State the nominal annual interest rate.
Determine the balance on the day after Avril's first birthday.
Round your answer to the nearest cent.
Determine the balance on the day after Avril's $12$12th birthday.
Round your answer to the nearest cent.
Bill opens an account to help save for a house. He opens the account at the beginning of 2013 with an initial deposit of $\$40000$$40000 that is compounded annually at a rate of $3.7%$3.7% per annum. He makes further deposits of $\$1000$$1000 at the end of each year.
Sandy opens a savings account to motivate herself to save regularly. She opens the account at the start of September, 2013 with the intention of making regular deposits of $\$110$$110 at the end of each month. The interest rate for this account is $24%$24% per annum which compounds at the end of each month.
At the end of each month, Uther deposits $\$2000$$2000 into a savings account to help him set money aside for bills. This savings account earns $24%$24% p.a. interest, compounded monthly.
The table below shows the first few months of 2015. All values in the table are in dollars.