Gordon and Anita deposit 700.00 into a savings account which earns 11% 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

Solution

Amount : 871.38

Solution steps

Translate the problem into an equation:

A = 700 (1 + \frac{0.11}{12})^{12 \cdot 2}

700 (1 + \frac{0.11}{12})^{12 \cdot 2} = 871.37996 \dots

Round to the nearest hundredth:

871.38

Amount : 871.38

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