Answer: $81.03
Step-by-step explanation:
The interest is compounded annually which means that the future value formula applies:
Future value = Amount * ( 1 + rate) ^ number of years
Amount = $70
Rate = 5%
Number of years = 3 years
In 3 years, Ernesto will have:
= 70 * ( 1 + 5%)³
= $81.03
