Question

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

Answer 1

use the interes compounding formula

$A=P\cdot(1+r)^t$

Replace all values into the formula

$A=(400)\cdot(1+0.05)^3$$A=400\cdot(1.05)^3$$A=463.05$

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