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Tim and Haley deposit 3,052.00 into a savings account which earns 7% 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

Tim and Haley deposit 3, 052.00 into a savings account which earns 7% 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 : 3509.21

Solution steps

Translate the problem into an equation:

A = 3052 (1 + \frac{0.07}{12})^{12 \cdot 2}

3052 (1 + \frac{0.07}{12})^{12 \cdot 2} = 3509.20796 \dots

Round to the nearest hundredth:

3509.21

Amount : 3509.21

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