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Exam 2: Banking Services

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Question 1

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Jackson deposited $5,000 at 3.8% interest,compounded continuously,when he was 18 years old.How much will be in the account when he is 40 years old if he made no other deposits or withdrawals?

A) $19,000.19
B) $11,535.60
C) $10,691.38
D) $8,800.00

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Question 2

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Amy opened a savings account with $1,750 she received for graduation.The account pays 4.3% simple interest.What is the balance after 6 months?

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$1,787.63;I = prt = ...

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Question 3

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To reconcile a check register means to match all the entries in the register with the statement received from the bank and correct any discrepancies.

The Parsons have a balance of $3,664.47 in their check register.On their bank statement,the balance on the account is $2,346.89.Not reported on the bank statement are checks of $324.56,$25.50,$78.92,and $30.25.There are outstanding deposits in the amount of $500 and $1,456.81.There are three ATM withdrawals of $60 each.What do the Parsons need to do to reconcile their checkbook?

LaToya has $113.94 in her checking account.During the week,she goes to an ATM and withdraws $40.She is charged a usage fee of $2.50.The following week she deposits her paycheck of $189.73.She writes two checks,one for $22.50 and the other for $70.18.What is the current balance in her checking account?

Ron and Annie have $1,239.45 in their checking account.During the week,Annie goes to an ATM and withdraws $80.The following week Ron deposits his paycheck of $689.65.Annie then pays bills online in the amounts of: $212.80,$55,$49.76,and $110.35.What is the current balance in their checking account?

Ashley and Dwayne are saving for retirement.Their goal is to have $250,000 in 15 years.They open up an account with an APR of 3.7% compounded monthly.How much should they deposit each month to meet their goal?

Malcolm wants to make a deposit into an account that earns interest.He wants to be able to access the money on a limited basis.What type of account should he NOT consider?

What is the interest earned on $20,000 for 5 years,at an interest rate of % compounded continuously?

Bob and Kathy want to save a total of $500,000 for retirement.How much should they deposit monthly into an account that pays 3.9% interest,compounded monthly,to meet their goal in 24 years?

Jericho wants to start saving to purchase a house.His goal is to save $95,000.If he deposits $56,000 into an account that pays 3.75% interest compounded daily,approximately how long will it take for his money to grow to the desired amount? Round your answer to the nearest tenth of a year.

Anne has opened up a systematic savings account into which she deposits $500 per month compounded monthly at a rate of 7.8%.How long will it take her to reach $500,000? Round your answer to the nearest tenth of a year.

Curtis deposited $10,000 into an account that compounds interest annually at a rate of 5%.He wants to know how long it will take for his money to double but doesn't have a calculator with logarithms.If he estimates the answer to his question using the Rule of 72s,and then later tries to verify his estimate with a better calculator,how many days will his estimate be off? Round your answer to the nearest day.

Maxine deposited $1,000 into an account that pays 4.5% interest,compounded daily.At the end of six months,she has earned $12 in interest.

Edward wants to have $50,000 in 10 years for college.What single deposit would he need to make now into an account that pays 4.3% interest,compounded daily,to meet his goal?

Erin has a balance of $1,150.34 in her check register.On her statement,the balance of her account is $844.93.Not reported on the bank statement are deposits of $125.56,$50,and $212.34.There are outstanding checks in the amount of $15 and $78.25 and an ATM withdrawal of $40.After Erin reconciles her check register with her statement,what entry does she need to make in her register?

The Federal Deposit Insurance Corporation insures bank accounts up to a particular amount.This means that if the bank fails,the money is guaranteed by the government.

Annual percent yield is higher than the annual percentage rate because APY takes into account the additional interest earned by compounding.

How much more would $1,000 earn in 5 years in an account compounded continuously than in an account compounded quarterly if the interest rate on both accounts is $3.7%?

Annalise has an online checking account at Wells Fargo Bank.Her balance at the beginning of the month was $5,000.00.During the month,she made deposits totaling $5,478.42,was charged a maintenance fee of $18,and earned $1.87 in interest.Her balance at the end of the month was $4,187.93.Annalise grew concerned because she spent considerably more than she made during the month.How much did Annalise spend during the month?