Question

javier deposited $321 in an account earning 5% interest compounded annually.
to the nearest cent, how much interest will he earn in 4 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.
$\\$$square$
submit

Explanation:

Step1: Identify values

\( p = 321 \), \( r = 0.05 \), \( t = 4 \)

Step2: Calculate balance \( B \)

\( B = 321(1 + 0.05)^4 = 321(1.05)^4 \)
\( (1.05)^4 \approx 1.21550625 \)
\( B \approx 321 \times 1.21550625 \approx 390.1775 \)

Step3: Calculate interest

Interest = \( B - p = 390.1775 - 321 = 69.1775 \approx 69.18 \)

Answer:

\( \$69.18 \)