Answer:
The interest is equal to \$13$13
we know that
The compound interest formula is equal to
A=P(1+\frac{r}{n})^{nt}A=P(1+
n
r
)
nt
where
A is the Final Investment Value
P is the Principal amount of money to be invested
r is the rate of interest in decimal
t is Number of Time Periods
n is the number of times interest is compounded per year
in this problem we have
\begin{gathered}t=3\ years\\ P=\$80\\ r=0.05\\n=1\end{gathered}
t=3 years
P=$80
r=0.05
n=1
substitute in the formula above
A=\$80(1+\frac{0.05}{1})^{3}=\$92.61A=$80(1+
1
0.05
)
3
=$92.61
Find the interest
I=A-P=\$92.61-\$80=\$12.61I=A−P=$92.61−$80=$12.61
Round to the nearest whole dollar
\$12.61=\$13$12.61=$13
