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Emmett opened a savings account and deposited 700.00. The account earns 1% interest, compounded quarterly. 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

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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