Question

Hunter has $300 in a savings account. The interest rate is 8%, compounded annually.To the nearest cent, how much will he have in 3 years?

Answer 1

Step-by-step explanation

If Hunter has $300 in savings and the interest rate is 8%, compounded annualy, we can apply the following equation:

`A=P(1+(r)/(n))^(nt)`

Where, P=Principal=300, r=rate (in decimal form) = 8/100 = 0.08, n=number of compounded times = 1 and t = time = 3

Substituting terms:

`A=300\cdot(1+(0.08)/(1))^(1\cdot3)`

Adding numbers:

`A=300\cdot(1.08)^3`

Computing the powers:

`A=300\cdot1.26`

Multiplying numbers:

`A=378`

In conclusion, there will be 378.00 in three years