edgar has $30 in an account that earns 5% interest compounded annually. to the nearest cent, how much…

Explanation:

Step1: Recall compound - interest formula

The compound - interest formula is $A = P(1 + r)^t$, where $P$ is the principal amount, $r$ is the annual interest rate (in decimal form), and $t$ is the number of years. Here, $P=$30$, $r = 0.05$ (since $5%=0.05$), and $t = 2$.

Step2: Calculate the amount after 2 years

$A=30\times(1 + 0.05)^2=30\times(1.05)^2=30\times1.1025 = 33.075$.

Step3: Calculate the interest earned

The interest earned $I=A - P$. So, $I=33.075−30=3.075$.

Answer:

$3.08$