Sara puts $500 in a bank at 4% simple interest per year. How much… Easy

The question

Question: Sara puts $500 in a bank at 4% simple interest per year.

How much interest does she earn in 3 years?

1 Find what we know

What do we know?

The money put in: $500.

The rate: 4% each year.

The time: 3 years.

What do we want?

The interest.

2 Name the unknown

We don't know the interest.

So we call it x.

4% means 4 out of 100: 4/100.

Here is the rule for it.

Interest = money put in, times the rate, times the years.

In short: I = P × r × t.

Interest is extra money for using money.

Simple interest is the same amount every year.

3 Write the equation

In words: the money put in, times the rate, times the years, makes the interest.

So the equation is x = 500 × 4/100 × 3.

Now we solve it.

Careful!

4% is not 4.

It means 4 out of 100: 4/100.

Without the 100, the interest would be $6000: more than the money put in!

4 Multiply the numbers we know

Cancel first.

500 and 100 can both be divided by 100.

500 becomes 5, and the 100 is gone.

Write what is left.

Multiply: 5 times 4 times 3 is 60.

So x = 60!

5 Answer the question

So the interest is $60.

6 Check

Let's check in the story.

In 1 year: 4/100 of $500 is $20.

3 years: $60 of interest, like the story says.

Does it make sense?

The interest is less than the money put in.

That makes sense for 4% a year.

So the answer is right!

Let's look back.

First: find what we know.

Then: name the unknown.

Then: write the equation.

Then: solve it.

Then: answer the question.

Last: check.

▶ Watch it solved

Omar puts $250 in a bank at 4% simple interest per year. How much… Medium

The question

Question: Omar puts $250 in a bank at 4% simple interest per year.

How much interest does he earn in 3 years?

1 Find what we know

What do we know?

The money put in: $250.

The rate: 4% each year.

The time: 3 years.

What do we want?

The interest.

2 Name the unknown

We don't know the interest.

So we call it x.

4% means 4 out of 100: 4/100.

Here is the rule for it.

Interest = money put in, times the rate, times the years.

In short: I = P × r × t.

Interest is extra money for using money.

Simple interest is the same amount every year.

3 Write the equation

In words: the money put in, times the rate, times the years, makes the interest.

So the equation is x = 250 × 4/100 × 3.

Now we solve it.

Careful!

4% is not 4.

It means 4 out of 100: 4/100.

Without the 100, the interest would be $3000: more than the money put in!

4 Multiply the numbers we know

Cancel first.

250 and 100 can both be divided by 50.

250 becomes 5, and 100 becomes 2.

Write what is left.

Multiply the whole numbers: 60.

So x is 60/2.

60 divided by 2 is 30.

So x = 30!

5 Answer the question

So the interest is $30.

6 Check

Let's check in the story.

In 1 year: 4/100 of $250 is $10.

3 years: $30 of interest, like the story says.

Does it make sense?

The interest is less than the money put in.

That makes sense for 4% a year.

So the answer is right!

Let's look back.

First: find what we know.

Then: name the unknown.

Then: write the equation.

Then: solve it.

Then: answer the question.

Last: check.

▶ Watch it solved

Dan borrows $1500 at 8% simple interest per year. How much interest… Harder

The question

Question: Dan borrows $1500 at 8% simple interest per year.

How much interest does he pay in 9 months?

1 Find what we know

What do we know?

The money put in: $1500.

The rate: 8% each year.

The time: 9 months.

What do we want?

The interest.

2 Name the unknown

We don't know the interest.

So we call it x.

8% means 8 out of 100: 8/100.

A year has 12 months.

So 9 months is 9/12, 3/4 of a year.

Here is the rule for it.

Interest = money put in, times the rate, times the years.

In short: I = P × r × t.

Interest is extra money for using money.

Simple interest is the same amount every year.

3 Write the equation

In words: the money put in, times the rate, times the years, makes the interest.

So the equation is x = 1500 × 8/100 × 3/4.

Now we solve it.

Careful!

8% is not 8.

It means 8 out of 100: 8/100.

Without the 100, the interest would be $9000: more than the money put in!

4 Multiply the numbers we know

Cancel first.

1500 and 100 can both be divided by 100.

1500 becomes 15, and the 100 is gone.

Write what is left.

Multiply the whole numbers: 120.

Times the top 3: 360.

So x is 360/4.

360 divided by 4 is 90.

So x = 90!

5 Answer the question

So the interest is $90.

6 Check

Let's check in the story.

In 1 year: 8/100 of $1500 is $120.

3/4 of a year: $90 of interest, like the story says.

Does it make sense?

The interest is less than the money put in.

That makes sense for 8% a year.

So the answer is right!

Let's look back.

First: find what we know.

Then: name the unknown.

Then: write the equation.

Then: solve it.

Then: answer the question.

Last: check.

▶ Watch it solved