A new bank customer with $5 comma 000 wants to open a money market account. The bank is offering a simple interest rate of 1.5%. The customer will earn
$75 in interest over the course of one year.
To calculate the interest earned on a money market account with simple interest, you can use the formula:
Interest = Principal x Rate x Time
In this case, the principal amount is $5,000, the interest rate is 1.5% (or 0.015 as a decimal), and the time is 1 year.
Interest = $5,000 x 0.015 x 1
Interest = $75
Therefore, the new bank customer will earn $75 in interest over the course of one year with a simple interest rate of 1.5%.