Answer:
Part A) [tex]I=\$152[/tex]
Part B) [tex]A=\$912[/tex]
Step-by-step explanation:
Part A) How much interest will he earn after 5 years?
we know that
The simple interest formula is equal to
[tex]I=P(rt)[/tex]
[tex]A=P+I[/tex]
where
A is the Final Investment Value
I is the Final Interest 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
[tex]t=5\ years\\ P=\$760\\r=4\%=4/100=0.04[/tex]
substitute in the formula above
[tex]I=760(0.04*5)[/tex]
[tex]I=\$152[/tex]
Part B) If Marco makes no deposits or withdrawals to his account in 5 years. How much will be in that account in 5 years?
we know that
The final investment value will be equal to the initial deposit plus the interest
so
[tex]A=P+I[/tex]
we have
[tex]P=\$760\\I=\$152[/tex]
substitute
[tex]A=760+152=\$912[/tex]
