Answer:
$30.88
Step-by-step explanation:
The account value is given by ...
A = P(1 +r/n)^(nt)
where P is the principal invested, r is the annual interest rate, t is the number of years, n is the number of times interest is compounded per year.
The amount of interest earned is the account value less the initial investment:
I = A - P = P(1 +r/n)^(nt) -P = P((1 +r/n)^(nt) -1)
Filling in the given values, we get ...
I = 500((1 +.03/12)^(12·2) -1) = 500(1.0025^24 -1) ≈ $30.88
The amount of interest earned is $30.88.
