Multiple choice

If you invest $1000$ dollars for $3 $ years and get $10$% compounded each year, then the compound interest is

  1. $331$
  2. $341$
  3. $351$
  4. $361$
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A Correct answer
Explanation

The amount after 3 years at 10% compound interest is 1000 * (1.1)^3 = 1000 * 1.331 = 1331. The compound interest is 1331 - 1000 = 331.

AI explanation

Using the compound amount formula A = P(1 + r/100)^3, the total amount is 1000 * (1 + 10/100)^3. This evaluates to 1000 * (11/10)^3, which equals 1000 * (1331/1000), giving a total amount of 1331. The compound interest is the final amount minus the principal, so 1331 - 1000 = 331.

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