Miki opened a savings account and deposited $200.00. The account earns 10% interest, compounded continuously. If she wants to use the money to buy a new bicycle in 1 year, how much will she be able to spend on the bike?

Use the formula A=Pert, where A is the balance (final amount), P is the principal (starting amount), e is the base of natural logarithms (≈2.71828), r is the interest rate expressed as a decimal, and t is the time in years.

Round your answer to the nearest cent.

$

Question

Regina Bradshaw

Mathematics

5 December, 17:13

Miki opened a savings account and deposited $200.00. The account earns 10% interest, compounded continuously. If she wants to use the money to buy a new bicycle in 1 year, how much will she be able to spend on the bike?

Use the formula A=Pert, where A is the balance (final amount), P is the principal (starting amount), e is the base of natural logarithms (≈2.71828), r is the interest rate expressed as a decimal, and t is the time in years.

Round your answer to the nearest cent.

$

+1

Answers (1)

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Marcus · Answer 1

A=200 (1.10^1) the formula is A=P (r^t) so I think the answer would be 220 so they would have 220 dollars to spend on a new bike I believe. remember that if the money is increasing you will always put a 1 in front of the percent, if it is decreasing you would do 1-whatever percentage.