Question

You need to save $1,300 to go overseas in two years. You deposit $800 in a savings account today. The account earns 10% interest. You will make an additional deposit in one year. How much must you deposit in one year in order to have enough to go on the trip?

Answer 1

The additional deposit to be made in one year should be $ 301.81.

Explanation:

Given that I need to save $ 1,300 to go overseas in two years, and I deposit $ 800 in a savings account today, that earns 10% interest, and I will make an additional deposit in one year, to determine how much must I deposit in one year in order to have enough to go on the trip, the following calculation must be performed:

800 x 1.1 = 880

(880 + X) x 1.1 = 1300

1300 / 1.1 = 1,181.81

1,181.81 - 880 = X

301.81 = X

Therefore, the additional deposit to be made in one year should be $ 301.81.