Mr. Schmidt is studying for his firefighter exam. He determines that he must study a minimum of 60 hours. He decides to spread h
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a) Simple interest earned by customer in 10 years is $ 675
b) Account balance after 10 years is $ 5175
<em><u>Solution:</u></em>
<em><u>The simple interest is given by formula:</u></em>
Where,
"p" is the principal
"r" is the rate of interest
"n" is the number of years
<em><u>a. How much interest will the customer earn in 10 years?</u></em>
From given,
Principal = p = $ 4500
Simple interest rate = r =1.5 %
n = 10
Substituting the values in formula,
Thus simple interest earned by customer in 10 years is $ 675
<em><u>b. What will the account balance be after 10 years ?</u></em>
Account balance = principal + simple interest
Account balance = 4500 + 675 = 5175
Thus account balance after 10 years is $ 5175