Question

Jason has $70 in a savings account that earns 5% interest, compounded annually.

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

Answer 1

$77.175
Rounded to nearest cent would be $77.18

Answer 2

$77.18

Explanation:

A = total amount

P = principal

I = interest

A = P(1 + r/n)^n·t

A = 70(1+.05)²

A = 70(1.05)²

A = 77.175

I = A - P