Jaden opened a savings account and deposited 500.00. The account earns 1% interest, compounded continuously. If he wants to use the money to buy a new bicycle in 1 year, how much will he be able to spend on the bike?

Solution

Solution

Amount : 505.03

Solution steps

Translate the problem into an equation:

A = 500 e^{0.01 \cdot 1}

500 e^{0.01 \cdot 1} = 505.02508 \dots

Round to the nearest hundredth:

505.03

Amount : 505.03

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