Example 6.37 from Prealgebra, 6.4 Solve Simple Interest Applications

Solve Simple Interest Applications: example 6.37

Loren lent his brother $$3,000$ to help him buy a car. In $4 years$ his brother paid him back the $$3,000$ plus $$660$ in interest. What was the rate of interest?

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.

Jim lent his sister $$5,000$ to help her buy a house. In $3$ years, she paid him the $$5,000,$ plus $$900$ interest. What was the rate of interest?

How did it go?

Write the formula.	$I = P r t$
Substitute the given information.	$660 = (3,000) r (4)$
Multiply.	$660 = (12,000) r$
Divide.	$\frac{660}{12,000} = \frac{(12,000) r}{12,000}$
Simplify.	$0.055 = r$
Change to percent form.	$5.5% = r$
Check your answer. Is 5.5% a reasonable interest rate to pay your brother?
$I = P r t$
$660 \overset{?}{=} (3,000) (0.055) (4)$
$660 = 660 ✓$
Write a complete sentence that answers the question.	The rate of interest was 5.5%.

Write the formula.	$I = P r t$
Substitute the given information.	$660 = (3,000) r (4)$
Multiply.	$660 = (12,000) r$
Divide.	$\frac{660}{12,000} = \frac{(12,000) r}{12,000}$
Simplify.	$0.055 = r$
Change to percent form.	$5.5% = r$
Check your answer. Is 5.5% a reasonable interest rate to pay your brother?
$I = P r t$
$660 \overset{?}{=} (3,000) (0.055) (4)$
$660 = 660 ✓$
Write a complete sentence that answers the question.	The rate of interest was 5.5%.

Solve Simple Interest Applications: example 6.37

Solution

Your turn

Solve Simple Interest Applications: example 6.37

Solution

Your turn