SOLUTION: Mitch opened a savings account and deposited $100.00. The account earns 2% interest, compounded continuously. If he wants to use the money to buy a new bicycle in 3 years, how much

Algebra ->  Customizable Word Problem Solvers  -> Finance -> SOLUTION: Mitch opened a savings account and deposited $100.00. The account earns 2% interest, compounded continuously. If he wants to use the money to buy a new bicycle in 3 years, how much      Log On

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Question 1050503: Mitch opened a savings account and deposited $100.00. The account earns 2% interest, compounded continuously. If he wants to use the money to buy a new bicycle in 3 years, how much will he be able to spend on the bike?
Answer by Boreal(15235) About Me  (Show Source):
You can put this solution on YOUR website!
P=Poe^(rt), where P is what he will have, Po is the starting principal, r is the rate and t is time in years.
P=100^e(0.02*3)
P=100*e^(0.06)=$106.18