Exercise 22 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 $2400 in a savings account with an annual interest rate of 7.5 %. We want to calculate the time it will take to reach $450 simple interest. Keep in mind that 7.5 % is written in decimal form as 0.075. P= 2400, r= 0.075, I= 450 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

450=( 2400)( 0.075)( t)

DivEqn

.LHS /(2400)(0.075).=.RHS /(2400)(0.075).

450/(2400)(0.075)=(2400)(0.075)( t)/(2400)(0.075)

CancelCommonFac

Cancel out common factors

450/(2400)(0.075)=(2400)(0.075)( t)/(2400)(0.075)

SimpQuot

Simplify quotient

450/(2400)(0.075)= t

Multiply

Multiply

450/180= t

CalcQuot

Calculate quotient

2.5= t

RearrangeEqn

Rearrange equation

t=2.5

We found that the interest reaches $450 in 2.5 years.