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Lila opened a savings account and deposited 1,000.00. The account earns 11% interest, compounded annually. If she wants to use the money to buy a new bicycle in 3 years, how much will she be able to spend on the bike?

Solution

Lila opened a savings account and deposited 1, 000.00. The account earns 11% interest, compounded annually. If she wants to use the money to buy a new bicycle in 3 years, how much will she be able to spend on the bike?

Solution

Amount : 1367.631

Solution steps

Translate the problem into an equation:

A = 1000 (1 + \frac{0.11}{1})^{1 \cdot 3}

1000 (1 + \frac{0.11}{1})^{1 \cdot 3} = 1367.631

Amount : 1367.631

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