Lesson 31 Section 2 ## BANKING PROBLEMS |
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Example 1. Eric deposited $1200 into a savings account where the rate of interest was 2½% annually. In one year, how much interest will he earn?
How much is 2½% of $1200? The deposit, $1200, is the Base. Now, 1% of $1200 is $12 Therefore, 2½% is 2½ × 12 = 24 + 6 = 30. (Lesson 26, Question 2) He will earn $30 interest. Example 2. Harriet wants to earn $130 in interest. The bank is paying 3¼% interest. How much should she deposit?
With a calculator, press
See the answer:
Example 3. Gerald put $800 into a CD (Certificate of Deposit) and received $42 in interest. What was the rate of interest?
$42 (the interest) is what percent of $800 (the deposit)? Write the fraction
To express that as a percent, let us complete this proportion:
To make 800 into 100, divide by 8. Divide 42 by 8 also: "8 goes into 42 five (5) times (40) with 2 left over."
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