Answer:
a) $780
b) $5,220
Step-by-step explanation:
The formula for simple interest is the following
A = P (1 + rt) ... where
A = final amount
P = initial principal balance
r = annual interest rate
t = time (in years)
If we apply the values to the formula for 10 years we get the following...
A = 4,500 * (1 + (0.016 * 10))
A = 4,500 * (1 + 0.16)
A = 4,500 * 1.16
A = 4,500 * 1.16
A = 5,220
Therefore the final amount in the bank account is 5,220 and the interest gained would be
5,220 - 4,500 = $720
