Solve Simple Interest Applications: example 6.36

Nathaly deposited $$12,500$ in her bank account where it will earn $4%$ interest. How much interest will Nathaly earn in $5$ years?

Work it out on paper first. Then open the solution one step at a time, and stop as soon as you can finish on your own.

Your turn

The book's Try It right after this example: same idea, new numbers. Only the answer is given.

Areli invested a principal of $$950$ in her bank account with interest rate $3%.$ How much interest did she earn in $5$ years?

How did it go?

Write the formula.	$I = P r t$
Substitute the given information.	$I = (12,500) (0.04) (5)$
Simplify.	$I = 2,500$
Check your answer. Is $2,500 a reasonable interest on $12,500 over 5 years?
At 4% interest per year, in 5 years the interest would be 20% of the principal. Is 20% of $12,500 equal to $2,500? Yes.
Write a complete sentence that answers the question.	The interest is $2,500.

Write the formula.	$I = P r t$
Substitute the given information.	$I = (12,500) (0.04) (5)$
Simplify.	$I = 2,500$
Check your answer. Is $2,500 a reasonable interest on $12,500 over 5 years?
At 4% interest per year, in 5 years the interest would be 20% of the principal. Is 20% of $12,500 equal to $2,500? Yes.
Write a complete sentence that answers the question.	The interest is $2,500.