Exercise 24 Page 270

Use the simple interest formula I=Prt, where I is the interest, P the principal, r the annual interest rate, and t the time in years.

Practice makes perfect

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 $400 in a savings account with we earn $18 simple interest in 9 months. We want to calculate the annual rate. Keep in mind that 9 months represents 912 years. P= 400, I= 18, t= 9/12 To calculate the interest, we will substitute these values into the simple interest formula and solve the resulting equation for r.

I=Prt

SubstituteValues

Substitute values

18=( 400)( r)( 9/12)

MultEqn

LHS * 12=RHS* 12

18* 12 = (400)( r)(9/12)* 12

FracMultDenomToNumber

a/12* 12 = a

18* 12 = (400)( r)(9)

DivEqn

.LHS /(400)(9).=.RHS /(400)(9).