Question

Luis wants to know how much he will have available to spend on his trip to Belize in three years if he deposits $2700 today at an interest rate of 7%.

If he deposits $2700 today at an annual interest rate of 7 percent, the amount Luis will have to spend on his trip to Belize in three years is $___?

Answer 1

Use the compound amount formula:  A = P(1+r)^t

Here, A = $2700(1+0.07)^3 = $3307.62

Luis will have accumulated $3307.62 to spend on his trib to Belize.