Question

rob and Kinsley despoit 1,000.00 into an savings account which earns 12% interest compounded monthly they want to use the money in the account to go on a trip in 2 years how much will they be able to spend

Answer 1

Here,

P = 1000

r = 12% = 0.12

n = 12 (since compounded monthly)

t = 2 (years)

Applying the formula to calculate compound interest, we have,

`\begin{gathered} A=P(1+(r)/(n))^(nt) \\ A=1000(1+(0.12)/(12))^(24)=1269.73 \end{gathered}`

They will be able to spend 1269.73.