Ask Question
13 April, 15:10

During her first year of college, Sara put $2000 in the bank to save for a trip to Italy after graduation. The money earned 3% simple annual interest. After 4 years, how much money did she have in the bank for her trip?

+4
Answers (1)
  1. 13 April, 16:35
    0
    Sara will have US$ 2,251.02 in the bank after 4 years for her trip to Italy.

    Step-by-step explanation:

    1. Let's review the data given to us for solving the question:

    Investment of Sara during her 1st year of college = US$ 2,000

    Duration of the investment = 4 years

    Annual interest rate = 3%

    2. Let's find the future value of this investment after 4 years, using the following formula:

    FV = PV * (1 + r) ⁿ

    PV = Investment of Sara during her 1st year of college = US$ 2,000

    number of periods (n) = 4

    rate (r) = 3% = 0.03

    Replacing with the real values, we have:

    FV = 2,000 * (1 + 0.03) ⁴

    FV = 2,000 * (1.03) ⁴

    FV = 2,000 * 1.12550881

    FV = 2,251.02

    Sara will have US$ 2,251.02 in the bank after 4 years for her trip to Italy.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “During her first year of college, Sara put $2000 in the bank to save for a trip to Italy after graduation. The money earned 3% simple ...” in 📘 Mathematics if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers