Question

Emily has $40 in a savings account that earns 10% interest, compounded annually.

To the nearest cent, how much interest will she earn in 2 years?

Answer 1

$48.

Explanation:

Annual means yearly.

The question is asking how much will Emma earn after 10% interest for 2 years.

To solve:

Find 120% of $40. This represents 100% (40) and 20% interest for the 2 years.

Round to the nearest cent if it's necessary.

Let's solve:

Let's find 20% of $40 first.

Divide 40 by 5:

$8 is 20% of 40.

Add 8 to 40:

8 + 40

= 48.

48 is your answer.

*48 represents 10% interest for 2 years.