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Bernie and Danielle deposit 8,000.00 into a savings account which earns 8% interest compounded monthly. They want to use the money in the account to go on a trip in 2 years. How much will they be able to spend?

Solution

Bernie and Danielle deposit 8, 000.00 into a savings account which earns 8% interest compounded monthly. They want to use the money in the account to go on a trip in 2 years. How much will they be able to spend?

Solution

Amount : 9383.1

Solution steps

Translate the problem into an equation:

A = 8000 (1 + \frac{0.08}{12})^{12 \cdot 2}

8000 (1 + \frac{0.08}{12})^{12 \cdot 2} = 9383.10345 \dots

Round to the nearest hundredth:

9383.1

Amount : 9383.1

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