Video: Solving Word Problems Involving Percentages and Simple Interest

A woman opened a bank account that offered 20.7% interest per year. Given that she kept 6000 LE in the account for a year, find the total amount she has after the interest is added.

01:55

Video Transcript

A woman opened a bank account that offered 20.7 percent interest per year. Given that she kept 6,000 Egyptian pounds in the account for a year, find the total amount she has after the interest is added.

We’re told in the question that the interest rate of 20.7 percent is paid per year and that she kept the amount in her account for one year. We can, therefore, calculate the amount of simple interest that she accrued by working out 20.7 percent of 6,000 Egyptian pounds. She invested 6,000 pounds, and the interest rate was 20.7 percent. To convert a percentage into a decimal, we divide by 100. When dividing by 100, all of our digits move two places to the right. This means that 20.7 percent written as a decimal is 0.207.

The word “of” in mathematics means multiply. We need to multiply 0.207 by 6,000. This is equal to 1242. 20.7 percent of 6,000 Egyptian pounds is 1,242 Egyptian pounds. As this is the interest accrued, we can calculate the total amount that she has in her account by adding this to 6,000. After one year, the woman has 7,242 Egyptian pounds in her account.

Nagwa uses cookies to ensure you get the best experience on our website. Learn more about our Privacy Policy.