Question: Molly has to start saving her money in a savings account. She puts £25 into the account each month for 12 months. The annual interest at net% is 1.6%. What is Mollys balance including intrest for each of these 12 months.
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Expert Answers
calendarEducator since 2013
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Since the annual interest is 1.6% and you want to calculate a balance every month first you need to know the interest rate each month. This would be:
``each month
Initial deposit: £25
1st month: £25 • (0.1333%) = `25 • .00333`
2nd month: £25.033325 + £25 = £50.033325 • (1.00133) = £50.09986
3rd month: £50.09986 + £25 = £75.09986 • (1.00133) = £75.199752
4th month: £100.199752 • (1.00133) = £100.3330178
5th month: £125.3330178 • (1.00133) = £125.4997
6th month: £150.4997 • (1.00133) = £150.699875
7th month: £175.699875 • (1.00133) = £175.933556
8th month: £200.933556 • (1.00133) = £201.20079
9th month: £226.20079 • (1.00133) = £226.5016
10th month: £251.5016 • (1.00133) = £251.83614
11th month: £276.83614 • (1.0013) = £277.20433
12th month: £302.20433 • (1.00133) = £302.606