Exercise 3 Page 171

If we have a savings account, the bank pays us interest for the use of our money. 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 are given that the principal is $580, the interest rate is 2 %, and the time is 6 months. We want to find the simple interest earned to the nearest cent. Keep in mind that 6 months represent 612 of a year and that 2 % is written in decimal form as 0.02. p= 580, r= 0.02, t= 6/12 To calculate the interest, let's substitute these values into the simple interest formula and evaluate the right-hand side.

I=prt

SubstituteValues

Substitute values

I= 580( 0.02)( 6/12)

Multiply

Multiply

I=11.6(6/12)

ReduceFrac

a/b=.a /6./.b /6.

I=11.6(6÷ 6/12÷ 6)

CalcQuot

Calculate quotient

I=11.6(1/2)

MoveLeftFacToNumOne

a* 1/b= a/b

I=11.6/2

CalcQuot

Calculate quotient

I=5.8

The simple interest earned is $ 5.80.