we know that
The simple interest formula is equal to
[tex]A=P(1+rt)[/tex]
[tex]A=P\mleft(1+rt\mright)[/tex]where
A is the Final Investment Value
P is the Principal amount of money to be invested
r is the rate of interest
t is Number of Time Periods
in this problem we have
P=$5,000
r=1.6%=1.6/100=0.016
t=30 years
substitute the given values
[tex]\begin{gathered} A=5,000(1+0.016\cdot30) \\ A=\$7,400 \end{gathered}[/tex]Part a
How much interest will the customer earn in 30 years?
I=A-P
I=7,400-5,000=$2,400
Part b
What will the account balance be after 30 years?
