Question

Omar has $8,815 in an account that earns 10% 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

Answer 1

B = 8815(1 + 0.10)^1 = 8815(1.1) = 9696.50.
Interest = B − p = 9696.50 − 8815 = $881.50.