felix has $5,483 in an account. the interest rate is 12% compounded annually. to the nearest cent, how much…

felix has $5,483 in an account. the interest rate is 12% 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 $5,483 in an account. the interest rate is 12% 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

$p = 5483$, $r=0.12$, $t = 2$

Step2: Calculate the balance

$B=p(1 + r)^t=5483\times(1 + 0.12)^2=5483\times1.12^2=5483\times1.2544$ $B = 5483\times1.2544=6887.8752$

Step3: Calculate the interest

Interest $=B - p=6887.8752-5483 = 1404.8752\approx1404.88$

Answer:

$1404.88$