Answer:
- Darrell will earn $499.48
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Use the formula for compound interest:
where,
- A = the future amount,
- P = $4873, the initial amount,
- r = 5% = 0.05, the annual interest rate,
- n = 1, the number of compounds per year,
- t = 2, the time in years.
Plugging in the values given, we get:
To find the interest earned, subtract the principal from this amount:
- Interest = 5372.48 - 4873 = 499.48