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Toby and Bonnie deposit 10,000.00 into a savings account which earns 1% interest compounded monthly. They want to use the money in the account to go on a trip in 2 years. How much will they be able to spend? round to the nearest cent

Solution

Toby and Bonnie deposit 10, 000.00 into a savings account which earns 1% interest compounded monthly. They want to use the money in the account to go on a trip in 2 years. How much will they be able to spend? round to the nearest cent

Solution

Amount : 10201.93

Solution steps

Translate the problem into an equation:

A = 10000 (1 + \frac{0.01}{12})^{12 \cdot 2}

10000 (1 + \frac{0.01}{12})^{12 \cdot 2} = 10201.92843 \dots

Round to the nearest hundredth:

10201.93

Amount : 10201.93

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