josie has $4,000 in an account that earns 5% interest compounded annually. to the nearest cent, how much…

Answer:

$200.00

Explanation:

Step1: Identify the formula

The formula for compound - interest when compounded annually for 1 year is $I = P\times r$, where $P$ is the principal amount and $r$ is the annual interest rate (in decimal form).

Step2: Convert the interest rate to decimal

The interest rate $r = 5%=0.05$. The principal amount $P = 4000$.

Step3: Calculate the interest

$I=P\times r=4000\times0.05 = 200$. So the interest earned in 1 year is $200.00$.