Valeria deposited 80$ in an account earning 5% interest compounded annually. To the nearest cent, how much interest will she 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. $____
Q. Valeria deposited 80$ in an account earning 5% interest compounded annually. To the nearest cent, how much interest will she 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. $____
Convert to Decimal: Convert the interest rate from a percentage to a decimal by dividing by 100. 5%=1005=0.05
Plug Values into Formula: Plug the values into the compound interest formulaB=p(1+r)t. Here, p=$80, r=0.05, and t=2. B=80(1+0.05)2
Calculate Inside Parentheses: Calculate the value inside the parentheses first. 1+0.05=1.05
Raise to Power: Raise 1.05 to the power of 2. (1.05)2=1.1025
Multiply Principal Amount: Multiply the principal amount by the result from the previous step.B=80×1.1025
Perform Multiplication: Perform the multiplication to find the balance after 2 years. B=80×1.1025=88.20