Question

A new bank customer with $5,000 wants to open a money market account. The bank is offering a

simple interest rate of 1.5%.
a. How much interest will the customer earn in 30 years?
b. What will the account balance be after 30 years?​

Answer 1

Amount of interest in 30 year = $2,250

Account balance after 30 year = $7,250

Explanation:

Given:

Amount deposit P = $5,000

Simple interest rate = 1.5% = 0.015

Find:

Amount of interest in 30 year

Account balance after 30 year

Computation:

Interest = PRT

Amount of interest in 30 year = (5,000)(0.015)(30)

Amount of interest in 30 year = $2,250

Account balance after 30 year = P + I

Account balance after 30 year = $5,000 + $2,250

Account balance after 30 year = $7,250