Exercise 15 Page 173

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 $500, the interest rate is 3.75 %, and the time is 4 months. We want to find the simple interest earned to the nearest cent. Keep in mind that 4 months represent 412 of a year and that 3.75 % is written in decimal form as 0.0375. p= 500, r= 0.0375, t= 4/12 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= 500( 0.0375)( 4/12)

Multiply

Multiply

I=18.75(4/12)

ReduceFrac

a/b=.a /4./.b /4.

I=18.75(4÷ 4/12÷ 4)

CalcQuot

Calculate quotient

I=18.75(1/3)

MoveLeftFacToNumOne

a* 1/b= a/b

I=18.75/3

CalcQuot

Calculate quotient

I=6.25

The simple interest earned is $ 6.25.