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Bao was given $\$1,\!000$ for his birthday. He decided to invest the money in a bank account that earns $10\%$ interest, compounded annually. In dollars, how much total interest will Bao have earned 3 years later?

Respuesta :

JeanaShupp

Answer:  total interest

Step-by-step explanation:

The formula to find the compound interest is given by :-

[tex]I=P((1+r)^n-1)[/tex], where P is the principal amount, r is the rate of interest , n is the time period.

Given : P=$1000,   r=10%=0.01        n=3 years

Then, the interest in 3 years will be :-

[tex]I=1000((1+0.01)^3-1)\\\\\Rightarrow\ I=1000(1.030301-1)\\\\\Rightarrow\ I=1000(0.030301)=30.301\approx30.30[/tex]

Hence, Bao will have earned  total interest of $30.30.