Question

Mary invests $600 in a high-interest savings account. In the first year, the value of her savings increases by 8%. In the second year, there is a further increase of 8%. What is the total value of her investment after two years? Round your answer to the nearest dollar.

Answer 1

Therefore, the total value of Mary's investment after two years is $700.

Explanation:

To calculate the total value of Mary's investment after two years, we need to calculate the value of the investment after the first year, and then use that value to calculate the value after the second year.

In the first year, the value of the investment increases by 8%, so the value after the first year is:

Value after first year = $600 + 8% of $600

Value after first year = $600 + 0.08 * $600

Value after first year = $648

In the second year, the value of the investment increases by another 8%, so the value after the second year is:

Value after second year = Value after first year + 8% of Value after first year

Value after second year = $648 + 0.08 * $648

Value after second year = $699.84

Rounding to the nearest dollar, the total value of Mary's investment after two years is:

Total value after two years = $700