Math Problem Statement
Billy deposited
$
5,000
in an account earning 1% interest 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.
$
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Solution
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Math Problem Analysis
Mathematical Concepts
Simple Interest
Compound Interest
Formulas
B = p(1 + r)^t
Interest = B - p
Theorems
Compound Interest Formula
Suitable Grade Level
Grades 6-8
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