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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

Respuesta :

use the interes compounding formula

[tex]A=P\cdot(1+r)^t[/tex]

Replace all values into the formula

[tex]A=(400)\cdot(1+0.05)^3[/tex][tex]A=400\cdot(1.05)^3[/tex][tex]A=463.05[/tex]

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

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