Lorenzo and Clara deposit 3,513.00 into a savings account which earns 8% 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

Lorenzo and Clara deposit 3, 513.00 into a savings account which earns 8% 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

Amount : 4462.34

Solution steps

Translate the problem into an equation:

A = 3513 (1 + \frac{0.08}{12})^{12 \cdot 3}

3513 (1 + \frac{0.08}{12})^{12 \cdot 3} = 4462.34276 \dots

Round to the nearest hundredth:

4462.34

Amount : 4462.34

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