henry has $3,261 in an account. the interest rate is 5% compounded annually. to the nearest cent, how much…

henry has $3,261 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.

henry has $3,261 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.

Answer

Answer:

$163.05

Explanation:

Step1: Convert interest rate to decimal

$r = 5%=0.05$

Step2: Identify principal and time

$p = 3261$, $t = 1$

Step3: Calculate balance

$B=p(1 + r)^t=3261\times(1 + 0.05)^1=3261\times1.05 = 3424.05$

Step4: Calculate interest

$I=B - p=3424.05-3261=163.05$