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Lara opened a savings account and deposited 300.00. The account earns 10% interest, compounded monthly. 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

Solution

Amount : 404.45

Solution steps

Translate the problem into an equation:

A = 300 (1 + \frac{0.1}{12})^{12 \cdot 3}

300 (1 + \frac{0.1}{12})^{12 \cdot 3} = 404.45455 \dots

Round to the nearest hundredth:

404.45

Amount : 404.45

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