Question

Walter has $4,189 in a savings account that earns 10% interest, compounded annually.To the nearest cent, how much interest will he earn in 2 years?

Answer 1

`\begin{gathered} A=\text{ \$4,189} \\ i=10\text{ \%=0.1} \\ t=2 \\ F=\text{?} \\ F=A(1+i)^t \\ F=\text{4,189}(1+0.1)^2 \\ F=\text{4,189}(1.1)^2 \\ F=5068.69 \\ \text{Interest}=\text{ \$}5,068.69-\text{\$4,189} \\ \text{Interest}=\text{ \$879}.69 \\ \text{He will earn \$879}.69 \end{gathered}`