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Home > CC3 > Chapter 8 > Lesson 8.2.3 > Problem 8-90

8-90.
  1. Mary wants to have $8500 to travel to South America when she is 21. She currently has $6439 in a savings account earning 4% annual compound interest. Mary is 13 now. Homework Help ✎

    1. If Mary does not take out or deposit any money, how much money will Mary have when she is 15?

    2. Will Mary have enough money for her trip when she is 21?

    3. If Mary were to graph this situation, describe what the graph would look like.

Formula for compound interest:

A = P(1 + r)n

6439(1 + 0.04)2

$6964.42

Find how much money Mary will have in 8 years.

Is this amount enough?

Use the formula in (a).

Is the amount of money Mary has increasing or decreasing? In what way is it doing so?