# How much will he have to deposit as principal to have enough money in 1 year to buy the bike? Round your answer to the nearest cent.

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In 1 year, Paco wants to buy a bicycle that costs $600.00. If he opens a savings account that earns 13% interest compounded continuously, how much will he have to deposit as principal to have enough money in 1 year to buy the bike?

Round your answer to the nearest cent.

In 1 year, Paco wants to buy a bicycle that costs $600.00. If he opens a savings account that earns 13% interest compounded continuously, how much will he have to deposit as principal to have enough money in 1 year to buy the bike?

Round your answer to the nearest cent.

##### 1 Answer

$526.86

#### Explanation:

The formula for compound interest is

However, for continuous compounding.

Paco wants to buy a bike that costs $600.00, so

Plugging these values into our formula, we get