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Zachary and Alexa deposit 700.00 into a savings account which earns 1% interest compounded quarterly. 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 : 721.29

Solution steps

Translate the problem into an equation:

A = 700 (1 + \frac{0.01}{4})^{4 \cdot 3}

700 (1 + \frac{0.01}{4})^{4 \cdot 3} = 721.29116 \dots

Round to the nearest hundredth:

721.29

Amount : 721.29

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