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Popular Word Problems >

Ed is saving up money to buy a car. Ed puts 8,000.00 into an account which earns 1% interest, compounded annually. How much will he have in the account after 7 years?

Solution

E d i s s a v in g u p m o n ey t o b u y a c a r . E d p u t s 8, 000.00 in t o an a cco u n t w hi c h e a r n s 1% in t eres t, co m p o u n d e d ann u a ll y . Ho w m u c h w i ll h e ha v e in t h e a cco u n t a f t er 7 ye a rs ?

Solution

Amount : 8577.08

Solution steps

Translate the problem into an equation:

A = 8000 (1 + \frac{0.01}{1})^{1 \cdot 7}

8000 (1 + \frac{0.01}{1})^{1 \cdot 7} = 8577.08281 \dots

Round to the nearest hundredth:

8577.08

Amount : 8577.08

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