if the interest rate on a savings account is 0.018%, approximately how much money do you need to keep in this account for 1 year to earn enough interest to cover a single $9.99 Below-Minimum-Balance Fee?
A = $9.99, the amount needed after 1 year r = 0.018% = 0.00018, interest rate n = 12, compoundings per year t = 1, one year duration
Let P = required balance at the beginning of the year. Then [tex]P(1+ \frac{r}{n} )^{nt} = A[/tex] P(1 + 0.00018/12)¹² = 9.99 1.00018P = 9.99 P = $9.988 ≈ $9.99
