Question

in 3 years Layla wants to buy a new bicycle that costs 700.00 if she opens a savings account that earns 13%interest compounded quarterly how much will she have to despoit as principal to have enough money in 3 years to buy the bike

Answer 1

We will replace in the following equation:

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

We replace as follows:

`700=P(1+(0.13)/(3))^((3)(3))\Rightarrow P\approx477.85`

She would have to deposit approximately $477.85.