Delaney would like to contribute to the purchase of a used car for school. She invests $800 into an account that pays 3% interest compounded continuously. If she plans on helping pay for the car in two years, how much will she be able to contribute? Homework Help ✎
What is the number e? If you are not sure, review the introductory paragraph for lesson 10.3.3.
What is the formula for continuous compounding? If you are not sure, review problem 10-178.
A = Pert
A = 800e(.03)(2)
A = $849.47
A = total amount = unknown amount that Delaney will be able to contribute
P = is the principal (initial amount) = $800
e = 2.718
r = 3% or .03
t = 2