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Ronnie opened a savings account and deposited 100.00 the account earns 8% interest compounded monthly if he wants to use the money to buy a new bicycle in 3 years how much will he be able to spend on the bike

Respuesta :

The compound interest can be calculated as,

[tex]A=P(1+\frac{r}{n})^{nt}^{}[/tex]

Here, P = 100, r = 0.08 (since 8%=0.08), n =1/12, t = 3

Therefore,

[tex]A=100(1+\frac{0.08}{\frac{1}{12}})^{\frac{3}{12}}=118.321[/tex]

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