Exercise 16 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 $250, the interest rate is 2.85 %, and the time is 3 years. We want to find the simple interest earned to the nearest cent. Keep in mind that 2.85 % is written in decimal form as 0.0285. p= 250, r= 0.0285, t= 3 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= 250( 0.0285)( 3)

Multiply

Multiply

I=21.375

RoundDec

Round to 2 decimal place(s)

I ≈ 21.38

The simple interest earned is about $ 21.38.