Nate and Kira deposit 1,000.00 into a savings account which earns 6% interest compounded annually. 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

Nate and Kira deposit 1, 000.00 into a savings account which earns 6% interest compounded annually. 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 : 1123.6

Solution steps

Translate the problem into an equation:

A = 1000 (1 + \frac{0.06}{1})^{1 \cdot 2}

1000 (1 + \frac{0.06}{1})^{1 \cdot 2} = 1123.6

Amount : 1123.6

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