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Brendan and Luna deposit 2,734.00 into a savings account which earns 4% interest compounded annually. 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

Brendan and Luna deposit 2, 734.00 into a savings account which earns 4% interest compounded annually. 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

Amount : 3075.38

Solution steps

Translate the problem into an equation:

A = 2734 (1 + \frac{0.04}{1})^{1 \cdot 3}

2734 (1 + \frac{0.04}{1})^{1 \cdot 3} = 3075.378176

Round to the nearest hundredth:

3075.38

Amount : 3075.38

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