Answer:
Joni is not correct because she used the simple interest rate formula, not the compound interest rate formula. She will have $231.53.
Step-by-step explanation:
Joni put $200 in an interest-bearing account with an annual compound interest rate of 5%. Joni determined that after 3 years, she will have a total balance of $230.
Step 1: P = 200, r = 5, t = 3
Step 2: I = 200*0.05* 3
Step 3: I = 30
Step 4: 30 + 200 = 230
Joni is not correct because she used the simple interest rate formula, not the compound interest rate formula. She will have $231.53.
Above it is given, that annual compound interest rate of 5%
So, she should have calculated using the compound interest formula.
So, amount becomes :
= $231.53.