Santiago opened a savings account and deposited 3,000.00. The account earns 2% interest, compounded annually. If he wants to use the money to buy a new bicycle in 2 years, how much will he be able to spend on the bike?

Solution

Santiago opened a savings account and deposited 3, 000.00. The account earns 2% interest, compounded annually. If he wants to use the money to buy a new bicycle in 2 years, how much will he be able to spend on the bike?

Solution

Amount : 3121.2

Solution steps

Translate the problem into an equation:

A = 3000 (1 + \frac{0.02}{1})^{1 \cdot 2}

3000 (1 + \frac{0.02}{1})^{1 \cdot 2} = 3121.2

Amount : 3121.2

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