Billy’s parents opened up a savings account for him when he was born. They put $2,000.00 into the account where it has been earning 6% interest, compounded annually, for 12 years. How much compound interest has the account earned/accrued and what amount should be in the account now?

"Interest" is the amount of extra money you earn or you have to pay back.

The Compound Interest formula that will be used is: A = P(1 + r)t.

A = The amount of money (including the accrued interest) after __ years/months or the compound amount.
P = The principal saved or owed.
r = The interest rate earned per year
t = The time period of the loan or amount saved (notice that the time is put into the “power” position)