A new bank customer with
P = $ 5000
The bank is offering a simple interes rate
r = 1.9%
a) how much interes will the customer earn in 10 years
A = P(1 + rt)
t = 10 years
Calculation:
First, converting R percent to r a decimal
r = R/100 = 1.9%/100 = 0.019 per year.
Solving our equation:
A = 5000(1 + (0.019 × 10)) = 5950
A = $5,950.00
I = A - P = $950.00
b) After 10 years the account balance will be
The total amount accrued, principal plus interest, from simple interest on a principal of $5,000.00 at a rate of 1.9% per year for 10 years is $5,950.00.