ayana has $730 in an account. the interest rate is 3% compounded annually. to the nearest cent, how much…

ayana has $730 in an account. the interest rate is 3% compounded annually. to the nearest cent, how much interest will she earn in 3 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.

ayana has $730 in an account. the interest rate is 3% compounded annually. to the nearest cent, how much interest will she earn in 3 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

Explanation:

Step1: Identify the values

$p = 730$, $r=0.03$, $t = 3$

Step2: Calculate the balance $B$

$B=p(1 + r)^t=730\times(1 + 0.03)^3=730\times(1.03)^3$ $(1.03)^3=1.03\times1.03\times1.03 = 1.092727$ $B=730\times1.092727=797.69071$

Step3: Calculate the interest

Interest $=B - p=797.69071-730 = 67.69071\approx67.69$

Answer:

$67.69$