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Xavier opened a savings account and deposited 2,000.00. The account earns 15% interest, compounded monthly. 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

Xavier opened a savings account and deposited 2, 000.00. The account earns 15% interest, compounded monthly. 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 : 3127.89

Solution steps

Translate the problem into an equation:

A = 2000 (1 + \frac{0.15}{12})^{12 \cdot 3}

2000 (1 + \frac{0.15}{12})^{12 \cdot 3} = 3127.88763 \dots

Round to the nearest hundredth:

3127.89

Amount : 3127.89

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