Annabelle sold cookies for a fundraiser. She deposited the 125 she earned in a savings account. The account earns 5.5% compounded annually. If she does not make any deposits or withdrawals for 2 years, how much will she have in her account?

Solution

A nnab e ll e so l d coo ki es f or a f u n d r ai ser . S h e d e p os i t e d t h e 125 s h e e a r n e d in a s a v in g s a cco u n t . T h e a cco u n t e a r n s 5.5% co m p o u n d e d ann u a ll y . I f s h e d oes n o t mak e an y d e p os i t s or w i t h d r a w a l s f or 2 ye a rs, h o w m u c h w i ll s h e ha v e in h er a cco u n t ?

Amount : 139.13

Solution steps

Translate the problem into an equation:

A = 125 (1 + \frac{0.055}{1})^{1 \cdot 2}

125 (1 + \frac{0.055}{1})^{1 \cdot 2} = 139.128125

Round to the nearest hundredth:

139.13

Amount : 139.13