Question

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Part 1
A new bank customer with ​$2500 wants to open a money market account. The bank is offering a simple interest rate of ​%1.3
a. How much interest will the customer earn in 20 ​years?
b. What will the account balance be after 20 ​years?
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Part 1
a. The customer will earn ​$

Answer 1

a) $650

b) $3150

Explanation:

Simple interest:

To find the simple interest, multiply the principal amount (P), the rate of interest(r) and number of years (t).

`\boxed{\bf Simple \ Interest = P*r*t}`

a) P= $2500

r = 1.3% = 1.3 ÷ 100 = 0.013

t = 20 years

SI = 2500 * 0.013 * 20

= $650

Interest = $ 650

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b) To find the account balance after 20 years, add the amount invested with the interest.

Amount after 20 years = P + Interest

= 2500 + 650

= $3150

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