Nina opened a savings account and deposited $300.00. The account earns 4% interest, compounded monthly. If she wants to use the money to buy a new bicycle in 3 years, how much will she be able to spend on the bike?

up to $338.18

Step-by-step explanation:

Use the compound amount formula:

A = P (1 + r/n) ^ (n*t), where r is the interest rate as a decimal fraction and n is the number of compounding periods per year.

Here, A = $300 (1 + 0.04/12) ^ (12*3), or

A = $300 (1.0033333) ^*36, or

A = $300 (1.127) = $338.18

Nina will be able to spend up to $338.18 on a new bike.

Turn 4% into a decimal by dividing it by 100

4/100=0.04

0.04times300=$12 in interest

12months times 3yrs=36 months

36times$12=$432

nina will be able to spend $432 on the bike