Tommy and Cora deposit 8,000.00 into a savings account which earns 5% interest compounded monthly. 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

Tommy and Cora deposit 8, 000.00 into a savings account which earns 5% interest compounded monthly. 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

Amount : 9291.78

Solution steps

Translate the problem into an equation:

A = 8000 (1 + \frac{0.05}{12})^{12 \cdot 3}

8000 (1 + \frac{0.05}{12})^{12 \cdot 3} = 9291.77785 \dots

Round to the nearest hundredth:

9291.78

Amount : 9291.78

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