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Richard opened a savings account and deposited 600.00. The account earns 1% interest, compounded annually. If he wants to use the money to buy a new bicycle in 3 years, how much will he be able to spend on the bike?

Solution

Solution

Amount : 618.18

Solution steps

Translate the problem into an equation:

A = 600 (1 + \frac{0.01}{1})^{1 \cdot 3}

600 (1 + \frac{0.01}{1})^{1 \cdot 3} = 618.1806

Round to the nearest hundredth:

618.18

Amount : 618.18

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