Question

Trudy opened a savings account and deposited $100.00. The account earns 4% 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?

Answer 1

Trudy deposited $100.00 into the savings account, the interest rate is 4% (or 0.04 as a decimal), and she wants to withdraw the money after 1 year.

A = 100 * e^(0.04 * 1)

A = 100 * 1.0408107747

A= A is approximately $104.08.

Step-by-step explanation:

Trudy will be able to spend approximately $104.08 on her new bicycle