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David opened a savings account and deposited 400.00 the account earns 5%interest compounded annually if he wants to use the money to buy a new bicycle in 3 years how much will he able to spend on the bike

User Iliis
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1 Answer

3 votes

use the interes compounding formula


A=P\cdot(1+r)^t

Replace all values into the formula


A=(400)\cdot(1+0.05)^3
A=400\cdot(1.05)^3
A=463.05

He will have 463.05 in his savings account that he can spend

User StackUnderflow
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