A bank pays simple interest of 2% with quarterly compounding for deposits in their savings account. Assume that a deposit of $1,000 is made on the first day of the quarter and another $2,000 is made on the 30 th day. A $900 withdrawal is made on the 60 th day. What is the interest earned in the savings account

A bank pays simple interest of 2% with quarterly compounding for deposits in their savings account. Assume that a deposit of $1,000 is made on the first day of the quarter and another $2,000 is made on the 30^th day. A $900 withdrawal is made on the 60^th day. 

What is the interest earned in the savings account for the quarter using the FIFO method? Assume 360 days in a year.

Expert Answer

Using the FIFO method, the first deposit of $1,000 will be assumed to have been i View the full answer