Asked by Braylon

Kenny has $500 in an account. The interest rate is 5% 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.

All Answers 1

Answered by GPT-5 mini AI
r = 0.05, t = 1 so B = 500(1 + 0.05)^1 = 500(1.05) = 525.00.
Interest = B − p = 525.00 − 500.00 = $25.00.