Marvin opened a savings account and deposited 800.00. The account earns 14% interest, compounded annually. 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

Solution

Amount : 1185.24

Solution steps

Translate the problem into an equation:

A = 800 (1 + \frac{0.14}{1})^{1 \cdot 3}

800 (1 + \frac{0.14}{1})^{1 \cdot 3} = 1185.2352

Round to the nearest hundredth:

1185.24

Amount : 1185.24

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