What is the compound interest on a three-year, $100.00 loan at a 10 percent annual interest rate?

To calculate compound interest, you can use the formula:

[ A = P left(1 + frac{r}{n}right)^{nt} ]

Where:

– ( A ) is the amount of money accumulated after n years, including interest.

– ( P ) is the principal amount (the initial amount, $100.00).

– ( r ) is the annual interest rate (decimal form, so 10% = 0.10).

– ( n ) is the number of times that interest is compounded per year.

– ( t ) is the number of years the money is invested or borrowed (3 years).

Assuming the interest is compounded annually (n = 1):

1. Plug in the values into the formula:

[ A = 100 left(1 + frac{0.10}{1}right)^{1 times 3} ]

[ A = 100 left(1 + 0.10right)^3 ]

[ A = 100 left(1.10right)^3 ]

2. Calculate ( (1.10)^3 ):

[ (1.10)^3 = 1.331 ]

3. Now plug that back into the formula to find ( A ):

[ A = 100 times 1.331 = 133.10 ]

4. To find the compound