Jack and Rita deposit 1,601.00 into a savings account which earns 3.12% interest compounded annually. They want to use the money in the account to go on a trip in 2 years. How much will they be able to spend?

Solution

Jack and Rita deposit 1, 601.00 into a savings account which earns 3.12% interest compounded annually. They want to use the money in the account to go on a trip in 2 years. How much will they be able to spend?

Solution

Amount : 1702.46

Solution steps

Translate the problem into an equation:

A = 1601 (1 + \frac{0.0312}{1})^{1 \cdot 2}

1601 (1 + \frac{0.0312}{1})^{1 \cdot 2} = 1702.46087 \dots

Round to the nearest hundredth:

1702.46

Amount : 1702.46

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