Tammy deposited 20$ in an account earning 10% interest compounded annually. To the nearest cent, how much interest will she earn in 3 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. $____
Q. Tammy deposited 20$ in an account earning 10% interest compounded annually. To the nearest cent, how much interest will she earn in 3 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. $____
Convert to Decimal: Tammy's principal p is $20, the annual interest rate r is 10%, and the time t is 3 years. Convert the interest rate to decimal form by dividing by 100.r=10010%=0.10
Compound Interest Calculation: Use the compound interest formulaB=p(1+r)t to calculate the balance after 3 years.B=20(1+0.10)3
Calculate Inside Parentheses: Calculate the amount inside the parentheses first. 1+0.10=1.10
Raise to Power: Now raise 1.10 to the power of 3. (1.10)3=1.10×1.10×1.10
Perform Multiplication: Perform the multiplication.1.10×1.10×1.10=1.331
Find Balance: Multiply the principal by the result to find the balance.B=20×1.331
Subtract Principal: Perform the multiplication to find the final balance.B=20×1.331=26.62
Calculate Interest Earned: To find the interest earned, subtract the original principal from the final balance.Interest earned = B−pInterest earned = 26.62−20
Calculate Interest Earned: To find the interest earned, subtract the original principal from the final balance.Interest earned = B−pInterest earned = 26.62−20 Perform the subtraction to find the interest earned.Interest earned = 26.62−20=6.62