Explanation: Calculating interest earned in a savings account happens every day. The dollars of interest, 'I', depends on the number of dollars invested, 'p', the interest rate, 'r', and the amount of time, 't' the money is left in the account. The formula I = p * r * t. The rate for these problems will always be the 'rate per year' and must be listed as a decimal equivalent before it is used in the equation.
Find the amount of interest earned if the principal is $200 and the rate is 6% for 2.5 years. I = 200 * (.06) * (2.5) = 300, $300 interest was earned
Find the amount of interest earned if the principal is $400 and the rate is 2.5% for 4 years. I = 400 * (.025) * 4 = $40 $40 interest was earned
Directions: Calculate the amount of interest earned for each problem. Strive first to have high accuracy and then strive to increase your speed. Good luck and I hope you enjoy the challenge!