Henry deposited $420 into a savings account. There is a $5.00 per month service fee on the account. Also, Henry decides he wants to withdraw $25 a week for spending money. In how many months will Henry run out of money?
He withdraws 105 per months
He will run out in four months.
To calculate the number of months until Henry runs out of money, we need to consider both the monthly service fee and his weekly withdrawals.
First, let's determine the total weekly withdrawals Henry will make. He withdraws $25 per week, so in a month (assumed to be 4 weeks), he will withdraw $25 * 4 = $100.
Now, let's calculate the monthly expense due to the service fee. Henry is charged $5.00 per month.
To find out when Henry will run out of money, we need to subtract his monthly withdrawals and the service fee from the initial deposit each month.
The calculation can be represented as:
Amount remaining in the account = Initial deposit - (Monthly withdrawals + Service fee)
Let's break it down:
Amount remaining in the account = $420 - ($100 + $5) = $420 - $105 = $315
Now, let's repeat the process for subsequent months:
Month 1: Amount remaining in the account = $315 - ($100 + $5) = $210
Month 2: Amount remaining in the account = $210 - ($100 + $5) = $105
Month 3: Amount remaining in the account = $105 - ($100 + $5) = $0
Therefore, Henry will run out of money in 3 months.
Please note that this calculation assumes Henry makes the same withdrawals every week, despite the decreasing balance in his account. In reality, if Henry's balance reaches $0, he would not be able to continue withdrawing money.