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Popular Word Problems >

Rose opened a savings account and deposited 1,000.00. The account earns 9% interest, compounded monthly. If she wants to use the money to buy a new bicycle in 2 years, how much will she be able to spend on the bike?

Solution

R ose o p e n e d a s a v in g s a cco u n t an d d e p os i t e d 1, 000.00. T h e a cco u n t e a r n s 9% in t eres t, co m p o u n d e d m o n t h l y . I f s h e w an t s t o u se t h e m o n ey t o b u y a n e w bi cyc l e in 2 ye a rs, h o w m u c h w i ll s h e b e ab l e t o s p e n d o n t h e bik e ?

Solution

Amount : 1196.41

Solution steps

Translate the problem into an equation:

A = 1000 (1 + \frac{0.09}{12})^{12 \cdot 2}

1000 (1 + \frac{0.09}{12})^{12 \cdot 2} = 1196.41352 \dots

Round to the nearest hundredth:

1196.41

Amount : 1196.41

Popular Examples

Charlos purchased a machine for 85, 000 after a discount of 25%. Calculate the original price of the machine Bill invested 4200 in an account that pays an annual interest rate of 3.1%, compounded monthly. Find the amount in the account after one year, assuming no withdrawals are made.Do not round any intermediate computations, and round your answer to the nearest cent.A person places 398 in an investment account earning an annual rate of 9.7%, compounded continuously. where V is the value of the account in t years, P is the principal initially invested, e is the base of a natural logarithm, and r is the rate of interest, determine the amount of money, to the nearest cent, in the account after 7 years.When seven times a number is decreased by 5 , the result is 37 . What is the number?the sum of two numbers is 29 and their difference is 15. what are the numbers?