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Ayana has $730 in an account. The interest rate is 3% compounded annually.

To the nearest cent, how much interest will she earn in 3 years?

1 Answer

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Answer: $795.70.

Step-by-step explanation: To calculate the amount of interest that Ayana will earn in 3 years, we need to first determine the annual interest rate. If the interest rate is 3% compounded annually, then the annual interest rate is 0.03.

Next, we need to calculate the total amount of interest that Ayana will earn over the 3 year period. To do this, we can use the formula for compound interest: A = P(1 + r/n)^nt, where A is the total amount of interest earned, P is the principal (initial amount of money in the account), r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the time in years.

In this case, P = $730, r = 0.03, n = 1 (since the interest is compounded annually), and t = 3. Plugging these values into the formula, we get:

A = $730(1 + 0.03/1)^1*3 = $730(1.03)^3 = $730 * 1.09 = $795.70

Therefore, Ayana will earn $795.70 in total interest over the 3 year period. To the nearest cent, this is $795.70.

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