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Bryan opened a savings account and deposited 1,403.00. The account earns 11.74% interest, compounded monthly. If he wants to use the money to buy a new bicycle in 3 years, how much will he be able to spend on the bike?

Solution

Bryan opened a savings account and deposited 1, 403.00. The account earns 11.74% interest, compounded monthly. If he wants to use the money to buy a new bicycle in 3 years, how much will he be able to spend on the bike?

Solution

Amount : 1991.92

Solution steps

Translate the problem into an equation:

A = 1403 (1 + \frac{0.1174}{12})^{12 \cdot 3}

1403 (1 + \frac{0.1174}{12})^{12 \cdot 3} = 1991.92420 \dots

Round to the nearest hundredth:

1991.92

Amount : 1991.92

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