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Preston and Julie deposit 6,301.00 into a savings account which earns 4% interest compounded annually. 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

Preston and Julie deposit 6, 301.00 into a savings account which earns 4% interest compounded annually. 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 : 7087.77

Solution steps

Translate the problem into an equation:

A = 6301 (1 + \frac{0.04}{1})^{1 \cdot 3}

6301 (1 + \frac{0.04}{1})^{1 \cdot 3} = 7087.768064

Round to the nearest hundredth:

7087.77

Amount : 7087.77

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