Answer:
\(I=\$156.08\)
Step-by-step explanation:
we know that
The compound interest formula is equal to
\(A=P(1+\frac{r}{n})^{nt}\)
where
A is the Final Investment Value
P is the Principal amount of money to be invested
r is the rate of interest in decimal
t is Number of Time Periods
n is the number of times interest is compounded per year
in this problem we have
\(t=3\ years\\ P=\$1,250.00\\ r=4\%=4/100=0.04\
=1\)
substitute in the formula above
\(A=1,250.00(1+\frac{0.04}{1})^{1*3}\)
\(A=1,250.00(1.04)^{3}\)
\(A=\$1,406.08\)
Find out the interest
I=A-P
substitute
\(I=\$1,406.08-\$1,250.00\\I=\$156.08\)
