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Kenny has $500 in an account. The interest rate is 5% compounded annually.To the nearest cent, how much interest will he earn in 1 year?Use the formula B=p(1+r)t, where B is the balance (final amount), p is the principal (starting amount), r is the interest rate expressed as a decimal, and t is the time in years.

Kenny has 500 in an account The interest rate is 5 compounded annuallyTo the nearest cent how much interest will he earn in 1 yearUse the formula Bp1rt where B class=

Respuesta :

Solution:

Using the formula;

[tex]B=p(1+r)^t[/tex]

Where;

[tex]\begin{gathered} p=500,r=5\text{ \%}=0.05,t=1 \\ \\ B=500(1+0.05)^1 \\ \\ B=525 \end{gathered}[/tex]

CORRECT ANSWER: $525

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