Exercise 19 Page 269

If we borrow money from a bank, we pay the bank interest for the use of their money. Similarly, if we open a savings account, the bank deposits extra money on this account as interest. To calculate the interest I, we use the simple interest formula. I= P r t, where... I& = Interest P& = Principal r& = Annual interest rate t& = Time (in years)We know that we deposit $500 in a savings account with an annual interest rate of 3 %. We want to calculate the time it will take to reach $30 simple interest. Keep in mind that 3 % is written in decimal form as 0.03. P= 500, r= 0.03, I= 30 To calculate the interest, we will substitute these values into the simple interest formula and solve the resulting equation for t.

I=Prt

SubstituteValues

Substitute values

30=( 500)( 0.03)( t)

DivEqn

.LHS /(500)(0.03).=.RHS /(500)(0.03).

30/(500)(0.03)=(500)(0.03)( t)/(500)(0.03)

CancelCommonFac

Cancel out common factors

30/(500)(0.03)=(500)(0.03)( t)/(500)(0.03)

SimpQuot

Simplify quotient

30/(500)(0.03)= t

Multiply

Multiply

30/15= t

CalcQuot

Calculate quotient

2= t

RearrangeEqn

Rearrange equation

t=2

We found that the interest reaches $30 in 2 years.