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Jeffrey and Tisha deposit 8,142.00 into a savings account which earns 5% interest compounded monthly. 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

Jeffrey and Tisha deposit 8, 142.00 into a savings account which earns 5% interest compounded monthly. 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 : 9456.71

Solution steps

Translate the problem into an equation:

A = 8142 (1 + \frac{0.05}{12})^{12 \cdot 3}

8142 (1 + \frac{0.05}{12})^{12 \cdot 3} = 9456.70690 \dots

Round to the nearest hundredth:

9456.71

Amount : 9456.71

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