Exercise 6 Page 171

If we borrow money from a bank, we pay the bank interest for the use of their money. Similarly, if we have an unpaid balance on a credit card, we also pay interest to the credit card company. 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 loan amount is $290, the interest rate is 12.5 %, and the time is 6 months. We want to find the simple interest paid to the nearest cent. Keep in mind that 6 months represent 612 of a year and that 12.5 % is written in decimal form as 0.125. p= 290, r= 0.125, 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= 290( 0.125)( 6/12)

Multiply

Multiply

I=36.25(6/12)

ReduceFrac

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

I=36.25(6÷ 6/12÷ 6)

CalcQuot

Calculate quotient

I=36.25(1/2)

MoveLeftFacToNumOne

a* 1/b= a/b

I=36.25/2

CalcQuot

Calculate quotient

I=18.125

RoundDec

Round to 2 decimal place(s)

I≈ 18.13

The simple interest paid is about $ 18.13.