To calculate simple intrest rate you have to apply the following formula:
[tex]A=P\mleft(1+r\mright)^t[/tex]
Were
A: interest amount
P: principal investment
r: interest rate → always expressed as decimal value
t: time → normally in years
Once you calculated the amount A you have to add it to the initial balance to determine the balance at the end of the 10nth year:
P= $5000
r= 2.5 → 2.5/100=0.025
t=10 years
[tex]\begin{gathered} A=P(1+r)^t \\ A=5000(1+0.025)^{10} \end{gathered}[/tex]
Answer is B.
