Question

I NEED HELP !!!!!

Isabella opened a savings account and deposited $25,000.00. The account earns 20% interest, compounded annually. If she wants to use the money to buy a new car in 2 years, how much will she be able to spend on the car?

Answer 1

$11,000

Explanation:

1st year the account earned 20% from $25,000 = $5,000 | total = $30,000

2nd year the account earned 20% from $30,000 = $6,000

by adding the earnings of 2 years, she will be able to spend $5,000 + $6,000 = $11,000

Answer 2

In 2 years, she will be able to spend $36,000 on a new car.