Compound interest? pls helppp!

Robert and Pam deposit $800.00 into a savings account which earns 4% interest compounded continuously. They want to use the money in the account to go on a trip in 1 year. How much will they be able to spend?

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 Answer
Mar 16, 2018

Substitute in parts and solve
#A= 832.65# dollars

Explanation:

#A= P*e^(rt)#

Where r is #0.04#
T is #1#
And e is about #2.718#
The principal amount or P which is the starting amount is:
#800# dollars

#A= 800*e^(0.04*1)#

#A= 832.65# dollars