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Harold opened a savings account and deposited 800.00. The account earns 4% interest, compounded annually. If he wants to use the money to buy a new bicycle in 2 years, how much will he be able to spend on the bike?

Solution

Solution

Amount : 865.28

Solution steps

Translate the problem into an equation:

A = 800 (1 + \frac{0.04}{1})^{1 \cdot 2}

800 (1 + \frac{0.04}{1})^{1 \cdot 2} = 865.28

Amount : 865.28

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