SOLUTION: an opened a savings account and deposited $1,000.00. The account earns 1% interest, compounded continuously. If he wants to use the money to buy a new bicycle in 1 year, how much w

Question 1025326: an opened a savings account and deposited $1,000.00. 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?
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.

Answer by fractalier(6550) (Show Source): You can put this solution on YOUR website!
Using the formula

we plug in to get

He would be able to spend $1010.05
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