1. What is the Ending Balance Formula?

The Ending Balance Formula calculates the final amount in an account after considering all transactions and interest. It's a fundamental financial calculation used in personal finance, accounting, and banking to determine the closing balance of an account.

2. How Does the Calculator Work?

The calculator uses the ending balance formula:

Where:

• \( Starting \) — Initial account balance ($)
• \( Deposits \) — All money added to the account ($)
• \( Withdrawals \) — All money removed from the account ($)
• \( Interest \) — Interest earned on the account ($)

Explanation: The formula accounts for all financial activities in an account over a specific period to determine the final balance.

3. Importance of Calculating Ending Balance

Details: Calculating ending balance is essential for financial planning, budgeting, account reconciliation, and detecting potential errors or fraudulent activities in financial statements.

4. Using the Calculator

Tips: Enter all values in dollars. Starting balance, deposits, and withdrawals must be positive values. Interest can be positive (earned) or negative (charged).

5. Frequently Asked Questions (FAQ)

Q1: Can this calculator handle negative values?
A: The calculator is designed for positive values for starting balance, deposits, and withdrawals. Interest can be negative if interest was charged rather than earned.

Q2: What time period does this calculation cover?
A: The calculation can cover any time period (daily, monthly, yearly) as long as all values correspond to the same period.

Q3: Does this account for compound interest?
A: No, this is a simple calculation that adds the total interest amount. For compound interest calculations, a different calculator would be needed.

Q4: Can I use this for business accounting?
A: Yes, this formula is fundamental to both personal and business accounting for calculating account balances.

Q5: What if my ending balance is negative?
A: A negative ending balance indicates an overdrawn account where withdrawals and charges exceeded the available funds.