Ted and Kendra deposit 3,000.00 into a savings account which earns 4% interest compounded quarterly. 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

Ted and Kendra deposit 3, 000.00 into a savings account which earns 4% interest compounded quarterly. 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 : 3380.48

Solution steps

Translate the problem into an equation:

A = 3000 (1 + \frac{0.04}{4})^{4 \cdot 3}

3000 (1 + \frac{0.04}{4})^{4 \cdot 3} = 3380.47509 \dots

Round to the nearest hundredth:

3380.48

Amount : 3380.48

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