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Seth and Leah deposit 700.00 into a savings account which earns 3% interest compounded monthly. They want to use the money in the account to go on a trip in 3 years. How much will they be able to spend?

Solution

Solution

Amount : 765.84

Solution steps

Translate the problem into an equation:

A = 700 (1 + \frac{0.03}{12})^{12 \cdot 3}

700 (1 + \frac{0.03}{12})^{12 \cdot 3} = 765.83598 \dots

Round to the nearest hundredth:

765.84

Amount : 765.84

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