Question

Tristan and Rose deposit 800.00 into a savings account which earns 7% 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?

Answer 1

To find the amount Tristan and Rose will be able to spend, we use the formula for compound interest: A = P * e^(rt).

Therefore, the amount they will be able to spend is A = 800 * e^(0.07*1) = $854.87.

Step-by-step explanation:

To find the amount they will be able to spend, we will use the formula for compound interest: A = P * e^(rt), where A is the final amount, P is the principal deposit, r is the interest rate, t is the time in years, and e is Euler's number (approximately 2.71828). To find the amount Tristan and Rose will be able to spend, we use the formula for compound interest: A = P * e^(rt).

In this case, the principal deposit is $800.00, the interest rate is 7% (or 0.07), and the time is 1 year.

Therefore, the amount they will be able to spend is A = 800 * e^(0.07*1) = $854.87.