Question

Rodrigo has $5,617 in an account that earns 10% interest compounded annually.
To the nearest cent, how much interest will he earn in 2 years?
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 = 5617(1 + 0.10)^2 = 5617(1.1)^2 = 5617(1.21) = 6796.57.
Interest = 6796.57 − 5617 = $1,179.57.