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Ernesto has $20 in an account. The interest rate is 10% 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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The interest Ernesto will earn in 1 year to the nearest cent is 2200 cents.

Given the following data:

  • Principal = $20.
  • Interest rate = 10%
  • Time = 1 year.

To calculate how much interest Ernesto will earn in 1 year to the nearest cent:

How to calculate compound interest.

Mathematically, compound interest is given by this formula:

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

Where:

  • B is the balance.
  • P is the principal or starting amount.
  • R is the interest rate.
  • T is the time measured in years.

Substituting the given parameters into the formula, we have;

[tex]B=20(1+0.1)^1\\\\B=20(1.1)[/tex]

B = $22.

To cents:

B = [tex]22 \times 100[/tex]

B = 2200 cents.

Read more on interest here: brainly.com/question/24341207

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