Question

in 2 years Jordan wants to buy a bicycle that costs 800.00 if he opens a savings account that earns 6% interest compounded monthly how much will he have to despoit as principal to have enough money in 2 years to buy the bike

Answer 1

`\begin{gathered} P=(A)/((1+(r)/(n))^(nt)) \\ P=\text{?} \\ A=800 \\ r=\text{ 6\%=}(6)/(100)=0.06 \\ t=2 \\ P=(800)/((1+(0.06)/(12))^(12*2)) \\ P=(800)/(1.12715977621) \\ P=\text{ \$}709.748535113 \\ P=\text{ \$}709.75 \end{gathered}`