Question

Wesley and Mia deposit $800.00 into a savings account which earns 15% interest compounded annually. 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?

where A is the balance (final amount), P is the principal (starting amount), r is the interest rate expressed as a decimal, n is the number of times per year that the interest is compounded, and t is the time in years.
Round your answer to the nearest cent.

Answer 1

1,058

Explanation:

Interest= 800(.15)= 120 1 yr interest

A= 800 + 120= 920 on the 1st year

920 (.15)= 138 int. on the 2nd year

Therefore, 920+ 138= 1,058 final amount after 2 yrs.