Answer:
[tex]I=\$156.08[/tex]
Step-by-step explanation:
we know that
The compound interest formula is equal to
[tex]A=P(1+\frac{r}{n})^{nt}[/tex]
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
[tex]t=3\ years\\ P=\$1,250.00\\ r=4\%=4/100=0.04\\n=1[/tex]
substitute in the formula above
[tex]A=1,250.00(1+\frac{0.04}{1})^{1*3}[/tex]
[tex]A=1,250.00(1.04)^{3}[/tex]
[tex]A=\$1,406.08[/tex]
Find out the interest
I=A-P
substitute
[tex]I=\$1,406.08-\$1,250.00\\I=\$156.08[/tex]
