Let:
P be the initial amount of money called the Principal,
compounded
n times a year, with an
r annual interest rate, then after
t many years, the amount of money
A is given by the formula:
Remark
----------------------------------------------------------------------------------
r is generally a percentage like 3%, 7% etc and are applied in the formula as 0.03, 0.07...,
the interest is compounded generally annually (
n=1), quarterly (
n=4), monthly (
n=12), etc...
t is in years,
-------------------------------------------------------------------------------------
Thus, in our problem, P=$4,000, r=4%=0.04, n=12, t=1
Applying the formula:
At the end of the year Janise has 4,162.97-4,000≈163 more dollars than the Principal amount.
Thus, the interest earned during the year is 163 $.
Answer: $163