Question

A² benchmark Q³R² Oscar and Rhianna deposit $8,169.00 into a savings account which earns 5.63% 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

To calculate the amount Oscar and Rhianna will be able to spend on their trip in 2 years, we can use the formula for compound interest. Using the principal, interest rate, and compounding period given, we find that they will be able to spend $8,972.95.

Step-by-step explanation:

To calculate the amount Oscar and Rhianna will be able to spend, we can use the formula for compound interest: A = P(1 + r/n)^(nt), where A is the final amount, P is the principal (initial deposit), r is the annual interest rate (as a decimal), n is the number of times interest is compounded per year, and t is the number of years.

In this case, the principal is $8,169.00, the interest rate is 5.63% (or 0.0563 as a decimal), the interest is compounded monthly (so n = 12), and they want to go on the trip in 2 years (so t = 2).

Plugging these values into the formula, we get:

A = 8169(1 + 0.0563/12)^(12*2) = $8,972.95

Therefore, Oscar and Rhianna will be able to spend $8,972.95 for their trip.