What is the mathematical formula that you would use to describe the financial activity on a bank statement?

Question: What is the mathematical formula that you would use to describe the financial activity on a bank statement?

One of the most common questions that people have when they look at their bank statements is: what is the mathematical formula that you would use to describe the financial activity on a bank statement? In this blog post, we will try to answer this question and explain how you can use some simple math to understand your finances better.

A bank statement is a record of all the transactions that happen in your account during a certain period of time, usually a month. It shows how much money you have deposited, withdrawn, transferred, or spent using your debit card, credit card, or checks. It also shows any fees, interest, or penalties that you have incurred or earned.

To describe the financial activity on a bank statement, we can use a formula that looks something like this:

**Ending balance = Starting balance + Deposits - Withdrawals - Fees + Interest**

This formula tells us how much money we have left in our account at the end of the period, based on how much we had at the beginning, how much we added or took out, and how much we paid or received in fees and interest.

Let's look at an example to see how this formula works. Suppose you have the following transactions on your bank statement for January:

- Starting balance: $1000

- Deposit: $500 (salary)

- Withdrawal: $200 (cash)

- Withdrawal: $300 (rent)

- Fee: $10 (monthly maintenance fee)

- Interest: $2 (savings account interest)

Using the formula, we can calculate the ending balance as follows:

**Ending balance = 1000 + 500 - 200 - 300 - 10 + 2 = $992**

This means that you have $992 left in your account at the end of January.

Of course, this formula is a simplification and does not account for all the possible types of transactions that can happen on a bank statement. For example, it does not include transfers between accounts, overdrafts, refunds, or charges that are pending or disputed. However, it can give you a general idea of how your money flows in and out of your account and help you plan your budget accordingly.

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