The Average Monthly Balance in Aaron's Bank Account Is $2,000

question 23

Multiple Choice

The average monthly balance in Aaron's bank account is $2,000.Aaron spends the same amount of money each day during the month,and at the end of the month his account balance is $0.Aaron's monthly starting balance is

• A)$2,000.
• B)$3,500.
• C)$4,000.
• D)$6,000.

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Definitions:

Compounded Semiannually

This term refers to the process of calculating interest on a principal amount where the interest is added to the principal to compute further interest, occurring twice a year.

Loan

A sum of money borrowed that is expected to be paid back with interest.

Annual Interest Rate

The percentage of interest that will be charged or earned on a sum of money over a one-year period.

Tenth Year-end Deposit

The act of placing funds into a financial account or investment at the end of the tenth year of the account or investment's existence.