You consistently deposit $250.00 into a savings account on the 15th of each month, and the account earns a 2.5% APR. How much is the balance of your savings account at the end of the 3rd full month? Round to the nearest penny.
To calculate the balance of the savings account at the end of the 3rd month, we need to calculate the interest earned on each deposit and add that to the balance.
First, let's calculate the interest earned on the first deposit made on the 15th of the first month:
Interest = $250 * 2.5% / 12 = $1.04
So, the balance after the first deposit is $250 + $1.04 = $251.04.
Now, let's calculate the interest earned on the second deposit made on the 15th of the second month:
Interest = $250 * 2.5% / 12 = $1.04
Adding this interest to the balance after the first deposit, the balance after the second deposit is $251.04 + $250 + $1.04 = $502.08.
Finally, let's calculate the interest earned on the third deposit made on the 15th of the third month:
Interest = $250 * 2.5% / 12 = $1.04
Adding this interest to the balance after the second deposit, the balance after the third deposit is $502.08 + $250 + $1.04 = $753.12.
Therefore, the balance of the savings account at the end of the 3rd full month is $753.12.