Seema deposited $800 in a saving account earning 3.24% compounded annually. To the nearest cent, how much will she have in 3 years?



Answer :

Given:

Seema deposited $800 in a saving account earning 3.24% compounded

annually.

So, we can conclude the following data:

P = initial investement = 800

r = interest ratio = 3.24% = 0.0324

n = 1

t = time 3 years

The final investment (A) will be calculated using the following formula:

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

Substitute with the given data:

[tex]A=800\cdot(1+\frac{0.0324}{1})^{1\cdot3}=800\cdot1.0324^3\approx880.3066[/tex]

Rounding to the nearest cent

So, the answer will be $880.31