Final answer:
The formula A = 2000 * (1 + 0.12)³ calculates the final amount after applying compound interest over three periods. To find the interest, subtract the original principal from the final amount. This calculation is based on the compound interest formula where interest is earned on both the initial principal and the accumulated interest.
Step-by-step explanation:
The question involves determining the final amount and interest from a compound interest formula. In the formula A = 2000 * (1 + 0.12)³, A represents the total amount after interest is applied, the number 2000 is the principal amount, 0.12 is the interest rate, and 3 signifies the number of periods the interest is compounded.
To calculate the final amount, we first evaluate the expression (1 + 0.12)³. The value calculated is then multiplied by the principal amount of 2000 to find the total future amount.
To find the interest earned, we subtract the principal from the final amount. The interest is the difference between what you end up with and what you started with, which represents the cost of borrowing money.