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Popular Word Problems >

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

Solution

L i z i s s a v in g u p m o n ey t o b u y a c a r . L i z p u t s 7, 000.00 in t o an a cco u n t w hi c h e a r n s 8% 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 s h e ha v e in t h e a cco u n t a f t er 7 ye a rs ?

Solution

Amount : 11996.77

Solution steps

Translate the problem into an equation:

A = 7000 (1 + \frac{0.08}{1})^{1 \cdot 7}

7000 (1 + \frac{0.08}{1})^{1 \cdot 7} = 11996.76988 \dots

Round to the nearest hundredth:

11996.77

Amount : 11996.77

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