Lucy invested 19,000 in an account paying an interest rate of 3% compounded annually. Assuming no deposits or withdrawals are made, how much money, to the nearest hundred dollars, would be in the account after 8 years

Solution

Lu cy in v es t e d 19, 000 in an a cco u n t p a y in g an in t eres t r a t e o f 3% co m p o u n d e d ann u a ll y . A ss u min g n o d e p os i t s or w i t h d r a w a l s a re ma d e, h o w m u c h m o n ey, t o t h e n e a res t h u n d re d d o ll a rs, w o u l d b e in t h e a cco u n t a f t er 8 ye a rs

Amount : 24068.63

Solution steps

Translate the problem into an equation:

A = 19000 (1 + \frac{0.03}{1})^{1 \cdot 8}

19000 (1 + \frac{0.03}{1})^{1 \cdot 8} = 24068.63154 \dots

Round to the nearest hundredth:

24068.63

Amount : 24068.63