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

edgar has $30 in an account that earns 5% 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.

edgar has $30 in an account that earns 5% 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

Explanation:

Step1: Identify values

$p = 30$, $r=0.05$, $t = 2$

Step2: Calculate the balance $B$

$B=p(1 + r)^t=30\times(1 + 0.05)^2=30\times1.05^2=30\times1.1025 = 33.075$

Step3: Calculate the interest

Interest $=B - p=33.075-30=3.075\approx3.08$

Answer:

$3.08$