Step by step
The question
Question: Ana puts $300 in a bank at 2% simple interest per year.
How much interest does she earn in 5 years?
1 Find what we know
What do we know?
The money put in: $300.
The rate: 2% each year.
The time: 5 years.
What do we want?
The interest.
2 Name the unknown
We don't know the interest.
So we call it x.
2% means 2 out of 100: 2/100.
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 = 300 × 2/100 × 5.
Now we solve it.
Careful!
2% is not 2.
It means 2 out of 100: 2/100.
Without the 100, the interest would be $3000: more than the money put in!
4 Multiply the numbers we know
Cancel first.
300 and 100 can both be divided by 100.
300 becomes 3, and the 100 is gone.
Write what is left.
Multiply: 3 times 2 times 5 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: 2/100 of $300 is $6.
5 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 2% 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.