Question

How much interest will $2200 earn at 3% interest for 5 years,
compounded annually? Give your answer in dollars and cents.

Answer 1

\[\large Y = a(b)^t\]
a = principal amount
b = rate
t = time

Answer 2

$333?

Answer 3

But remember for the rate, since this is an exponential growth question, you need to add a 1.

Answer 4

Let's substitute the amounts into its corresponding places.

What is the principal (starting amount)?

Answer 5

2200

Answer 6

Correct. Interest rate (as a decimal) ?

Answer 7

.03

Answer 8

Yes and remember that it is important to add the 1 because its an exponential growth problem. So it would be 1 + 0.03 = 1.03 as \(b\).

Answer 9

Time?