Question

mason deposited 80 in a savings account earning 5% interest, compounded monthly. to the nearest cent, how much interest will he darn in 3 years?

Answer 1

Principal, P = $80
monthly interest, i = 5%/12 = 0.05/12
Number of periods, n = 3*12 = 36

Interest earned after three years,
I = P((1+i)^n-1)
=80((1+0.05/12)^36-1)
=12.92 (to the nearest cent.