Question
Oscar has $3,000 in an account that earns 6% interest compounded annually.
To the nearest cent, how much interest will he earn in 1 year?
Use the formula B=p(1+r)t, where B is the balance (final amount), p is the principal (starting amount), r is the interest rate expressed as a decimal, and t is the time in years
To the nearest cent, how much interest will he earn in 1 year?
Use the formula B=p(1+r)t, where B is the balance (final amount), p is the principal (starting amount), r is the interest rate expressed as a decimal, and t is the time in years
Answers
GPT-4o mini
To determine the interest Oscar will earn in 1 year, we will use the formula \( B = p(1 + r)^t \).
Here are the values we need to plug into the formula:
- \( p = 3000 \) (the principal amount)
- \( r = 0.06 \) (the interest rate expressed as a decimal)
- \( t = 1 \) (the time in years)
Now, let's calculate the balance \( B \) after 1 year:
\[
B = 3000(1 + 0.06)^1
\]
\[
B = 3000(1.06)
\]
\[
B = 3000 \times 1.06 = 3180
\]
Now, to find the interest earned, subtract the principal from the balance:
\[
\text{Interest} = B - p = 3180 - 3000 = 180
\]
Therefore, the interest Oscar will earn in 1 year is **$180.00**.
Here are the values we need to plug into the formula:
- \( p = 3000 \) (the principal amount)
- \( r = 0.06 \) (the interest rate expressed as a decimal)
- \( t = 1 \) (the time in years)
Now, let's calculate the balance \( B \) after 1 year:
\[
B = 3000(1 + 0.06)^1
\]
\[
B = 3000(1.06)
\]
\[
B = 3000 \times 1.06 = 3180
\]
Now, to find the interest earned, subtract the principal from the balance:
\[
\text{Interest} = B - p = 3180 - 3000 = 180
\]
Therefore, the interest Oscar will earn in 1 year is **$180.00**.