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Popular Word Problems >

Edgar has 30 in an account that earns 5% interest compounded annually.To the nearest cent, how much interest will he earn in 2 years?

Solution

E d g a r ha s 30 in an a cco u n t t ha t e a r n s 5% in t eres t co m p o u n d e d ann u a ll y . T o t h e n e a res t ce n t, h o w m u c h in t eres t w i ll h e e a r n in 2 ye a rs ?

Solution

Interest : 3.075

Solution steps

Translate the problem into an equation:

33.075 = 30 + I

Solve for

I, 33.075 = 30 + I : I = 3.075

Interest : 3.075

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