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Stanley opened a savings account and deposited 400.00. The account earns 5% interest, compounded annually. 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 : 463.05

Solution steps

Translate the problem into an equation:

A = 400 (1 + \frac{0.05}{1})^{1 \cdot 3}

400 (1 + \frac{0.05}{1})^{1 \cdot 3} = 463.05

Amount : 463.05

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