You bank statement shows a current balance of AED 100,000 as a result of a single...

You bank statement shows a current balance of AED 100,000 as a result of a single deposit made 10 years previously. Over this period the interest rate has been 5%. The original deposit is nearest to

		AED 39,000
		AED 42,000
		AED 32,550
		AED 48,550

Solutions

Expert Solution

Since the compounding frequency isn't provided in the question, we can assume that the Principle (single deposit that was made 10 years back) was compounded annually over the past 10 years at an interest rate of 5% per annum.

The formula for compounding is as given below:

Amount = Principle * (1 + Interest Rate)^(Tenure)

100,000 = Principle* (1 + 5%)^10

Thus,

Principle = 100,000 / (1 + 5%)^10

Principle (single deposit that was made 10 years back) = AED 61,391.33

Note: The options provided are very distant from the answer that was arrived at. I have checked my solution again for the same and it seems correct as per the fundamentals of compounding and I hence request the student to kindly re-check if these are the options pertaining to the question. Another thing that could be checked is the data provided in the question; either the interest rate would be much higher than what is stated here or the tenure ought to be much higher so as to arrive at an answer closer to the options provided. Please let me know so that we can re-work the solution as per the revised data.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

1. Roshida Cowling shows a $1,181.11 checkbook balance. The bank statement shows a $2,111.46 balance and...

1. Roshida Cowling shows a $1,181.11 checkbook balance. The bank statement shows a $2,111.46 balance and a $10.00 service charge. Outstanding checks total $940.35. What is Roshida's adjusted checkbook balance? Does it balance with the bank statement. 2. Julie March has a checkbook balance of $565.67. She has not recorded these checks: Check 123 for $23.34, Check 124 for $45.88, and Check 125 for $76.05. Julie also needs to record a deposit of $125. What is her checkbook balance now?...

The bank statement of Ricardo's Jewelry shows a balance of $7,689.23. The bank charged a service...

The bank statement of Ricardo's Jewelry shows a balance of $7,689.23. The bank charged a service fee of $15.00. The account register shows deposits of $824.66 and $1,231.65 that do not appear on the statement. Four checks recorded in the register did not clear the bank by the end of the month. These were written for $18.65; $95.00; $122.36; and $55.98. The register is showing a balance of $9,468.55. What is the reconciled balance of this account?

If the bank statement at the end of the month shows a balance of IDR 360...

If the bank statement at the end of the month shows a balance of IDR 360 million, checks are still in circulation IDR 120 million, deposits in transit worth IDR 40 million and checks worth IDR 5 million are charged by the bank to the company account, what is the correct balance of the bank account at the end of the month? A. IDR 275.000.000 B. IDR 285.000.000 C IDR 205.000.000 D. IDR 435.000.000

BANK RECONCILIATION STATEMENT The cash at bank ledgerof Starlet Limted shows a debit balance of £...

BANK RECONCILIATION STATEMENT The cash at bank ledgerof Starlet Limted shows a debit balance of £ 4,500 on 31st October 2017. Cheques for £ 2,000 from customers that were recently paid into the bank have not yet been processed. Payments totalling £ 6,200 made by the business to its suppliers and others have not yet been presented to the bank statement for payment. The bank has charged £ 700 in bank charges. A cheque for £ 300 from a customer...

The cash account shows a balance of $85,000 before reconciliation. The bank statement does not

The cash account shows a balance of $85,000 before reconciliation. The bank statement does not include a deposit of $5,000 made on the last day of the month. The bank statement shows a collection by the bank of $2,400 and a customer’s check for $680 was returned because it was NSF. A customer’s check for $900 was recorded on the books as $1,080, and a check written for $138 was recorded as $183. The correct balance in the cash account...

The bank statement of Green’s Floral shows a final balance of $8,966 as of October 3...

The bank statement of Green’s Floral shows a final balance of $8,966 as of October 3 The present balance of the cash account in the ledger, after Green’s accountant has posted from the journal, is $8,030.50. The accountant took the following steps: 1) Verified that canceled checks were recorded correctly on the bank statement. 2) Discovered that a deposit of $1,003 made on Oct 31 was not recorded on the bank statement. 3) Noted outstanding checks: no. 1916, $461; no....

Del Gato Clinic's cash account shows a $16,226 debit balance and its bank statement shows $16,318...

Del Gato Clinic's cash account shows a $16,226 debit balance and its bank statement shows $16,318 on deposit at the close of business on June 30. Outstanding checks as of June 30 total $3,079. The June 30 bank statement lists a $90 bank service charge. Check No. 919, listed with the canceled checks, was correctly drawn for $889 in payment of a utility bill on June 15. Del Gato Clinic mistakenly recorded it with a debit to Utilities Expense and...

Del Gato Clinic's cash account shows a $16,565 debit balance and its bank statement shows $16,119...

Del Gato Clinic's cash account shows a $16,565 debit balance and its bank statement shows $16,119 on deposit at the close of business on June 30. Outstanding checks as of June 30 total $2,614. The June 30 bank statement lists a $45 bank service charge. Check No. 919, listed with the canceled checks, was correctly drawn for $789 in payment of a utility bill on June 15. Del Gato Clinic mistakenly recorded it with a debit to Utilities Expense and...

7. The cash account shows a balance of $62,000 before reconciliation. The bank statement does not...

7. The cash account shows a balance of $62,000 before reconciliation. The bank statement does not include a deposit of $4,800 made on the last day of the month. The bank statement shows a collection by the bank of $1,500 and a customer's check for $635 was returned because it was NSF. A customer’s check for $580 was recorded on the books as $850, and a check written for $252 was recorded as $525. What is the correct balance in...

The cash account shows a balance of IDR 450 million before reconciliation. The bank statement has...

The cash account shows a balance of IDR 450 million before reconciliation. The bank statement has not taken into account the IDR 23 million deposit made on the last day of the month concerned. The bank statement shows direct billing by the bank to customer A for IDR 9,400,000 and a check from customer B for IDR 3,200,000 returned as it is NSF. Checks from customer C for IDR 4,500,000 are recorded in the book worth IDR 5,400,000 and customer...

Subjects