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Quinn opened a savings account and deposited 1,197.00. The account earns 11.35% interest, compounded quarterly. If he wants to use the money to buy a new bicycle in 3 years, how much will he be able to spend on the bike?

Solution

Quinn opened a savings account and deposited 1, 197.00. The account earns 11.35% interest, compounded quarterly. If he wants to use the money to buy a new bicycle in 3 years, how much will he be able to spend on the bike?

Solution

Amount : 1674.6

Solution steps

Translate the problem into an equation:

A = 1197 (1 + \frac{0.1135}{4})^{4 \cdot 3}

1197 (1 + \frac{0.1135}{4})^{4 \cdot 3} = 1674.60457 \dots

Round to the nearest hundredth:

1674.6

Amount : 1674.6

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