Michael deposited $40 in a savings account earning 10% interest, compounded annually. To the nearest cent, how much will he have in 3 years?

Ok so, as we can see in the question, he has $40 in his account and he earns 10% interest each year (annually).

So to find the interest he earns each year, we need to find 10% of 40.

Simply multiply 40 by 0.10 and that gives us 4

This means that Micheal earned $4 in that first year. 4 + 40 = 44

Micheal has $44 in the first year of his savings account.

Now we need to find 10% of 44.

44 * 0.10 = 4.4

Now Michael has made $4.40 in interest of the second year.

So we add 4.4 and 44 and we get 48.4

Michael has $48.40 in his savings account on the second year.

For the last year, we find 10% of 48.40!

0.10 * 48.40 = 4.84

This means that Michael has made $4.84 in the third year of saving his money.

Now we add 4.84 and 48.40 and that gives us ...

$53.24!