Step by step
The question
Question: Mia puts $1000 in a bank at 3% simple interest per year.
How much interest does she earn in 4 years?
1 Find what we know
What do we know?
The money put in: $1000.
The rate: 3% each year.
The time: 4 years.
What do we want?
The interest.
2 Name the unknown
We don't know the interest.
So we call it x.
3% means 3 out of 100: 3/100.
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 = 1000 × 3/100 × 4.
Now we solve it.
Careful!
3% is not 3.
It means 3 out of 100: 3/100.
Without the 100, the interest would be $12000: more than the money put in!
4 Multiply the numbers we know
Cancel first.
1000 and 100 can both be divided by 100.
1000 becomes 10, and the 100 is gone.
Write what is left.
Multiply: 10 times 3 times 4 is 120.
So x = 120!
5 Answer the question
So the interest is $120.
6 Check
Let's check in the story.
In 1 year: 3/100 of $1000 is $30.
4 years: $120 of interest, like the story says.
Does it make sense?
The interest is less than the money put in.
That makes sense for 3% 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.