felix has $100 in an account that earns 5% interest compounded annually. to the nearest cent, how much…

felix has $100 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.

felix has $100 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

$p = 100$, $r=0.05$, $t = 2$

Step2: Calculate the balance

$B=p(1 + r)^{t}=100\times(1 + 0.05)^{2}=100\times1.05^{2}=100\times1.1025 = 110.25$

Step3: Calculate the interest

Interest $=B - p=110.25-100 = 10.25$

Answer:

$10.25$