Ernesto has $70 in a savings account. The interest rate is 5%, compounded annually. To the nearest cent, how much will he have i

Question

3 years ago

15

n 3 years?

1 answer:

Paul [167] · Answer 1 · 2022-08-11T21:17:07+03:00

Answer: $81.03

Step-by-step explanation:

The interest is compounded annually which means that the future value formula applies:

Future value = Amount * ( 1 + rate) ^ number of years

Amount = $70

Rate = 5%

Number of years = 3 years

In 3 years, Ernesto will have:

= 70 * ( 1 + 5%)³

= $81.03