Karen has $30 in a savings account.

The interest rate is 5%,

compounded annually.

To the nearest cent, how much interest will she earn in 3 years?
$

You answered:
24
remember
B = p(1 + r)
t

B is the balance (final amount).
p is the principal (starting amount).
r is the interest rate expressed as a decimal.
t is the time in years.
The interest is the balance minus the principal.
solve
Write the rate as a decimal.
5% = 0.05


Calculate the balance.
B = p ( 1 + r )
t


= $30 ( 1 + 0.05 )
3



= $30 ( 1.05 )
3



= $30 ( 1.157625 )

= $34.72875


Now use this to find the interest, which is the balance minus the
principal.
$34.72875 $30 = $4.72875


Round to the nearest cent.
$4.72875 $4.73


To the nearest cent, the interest will be $4.73.