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Miguel opened a savings account and deposited 2,669.00. The account earns 13.03% 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

Miguel opened a savings account and deposited 2, 669.00. The account earns 13.03% 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

Amount : 3854.16

Solution steps

Translate the problem into an equation:

A = 2669 (1 + \frac{0.1303}{1})^{1 \cdot 3}

2669 (1 + \frac{0.1303}{1})^{1 \cdot 3} = 3854.16014 \dots

Round to the nearest hundredth:

3854.16

Amount : 3854.16

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