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Perry and Lily deposit 2,000.00 into a savings account which earns 7% interest compounded quarterly. 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

Perry and Lily deposit 2, 000.00 into a savings account which earns 7% interest compounded quarterly. 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 : 2462.88

Solution steps

Translate the problem into an equation:

A = 2000 (1 + \frac{0.07}{4})^{4 \cdot 3}

2000 (1 + \frac{0.07}{4})^{4 \cdot 3} = 2462.87862 \dots

Round to the nearest hundredth:

2462.88

Amount : 2462.88

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