Step by step
The question
Question: Mia puts $2000 in a bank at 3% simple interest per year.
How much money will she have after 5 years?
1 Find what we know
What do we know?
The money put in: $2000.
The rate: 3% each year.
The time: 5 years.
What do we want?
All the money at the end.
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 = 2000 × 3/100 × 5.
Now we solve it.
4 Multiply the numbers we know
Cancel first.
2000 and 100 can both be divided by 100.
2000 becomes 20, and the 100 is gone.
Write what is left.
Multiply: 20 times 3 times 5 is 300.
So x = 300!
5 Answer the question
All the money: the $2000 put in, plus $300 interest, is $2300.
Careful!
The interest alone is not the answer.
The question asks for all the money: the money put in, plus the interest.
So there is $2300 at the end.
6 Check
Let's check in the story.
In 1 year: 3/100 of $2000 is $60.
5 years: $300 of interest.
Plus the money put in: $2300.
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.