Question Video: Solving Word Problem by Finding Simple Interest Involving Percentages | Nagwa Question Video: Solving Word Problem by Finding Simple Interest Involving Percentages | Nagwa

# Question Video: Solving Word Problem by Finding Simple Interest Involving Percentages Mathematics

Find the simple interest earned in a savings account given that \$552 is deposited for 7 months with an interest rate of 16.5% per year.

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### Video Transcript

Find the simple interest earned in a savings account given that 552 dollars is deposited for seven months with an interest rate of 16.5 percent per year.

The amount of simple interest can be calculated using the formula 𝐼 equals 𝑃 multiplied by 𝑅 multiplied by 𝑇. 𝐼 is the amount of interest. 𝑃 is the principal amount, in this case, the amount deposited. 𝑅 is the interest rate written as a decimal. And 𝑇 is the amount of time. In this question, the amount deposited was 552 dollars. So, 𝑃 equals 552. The interest rate was 16.5 percent per year. We can convert any percentage into a decimal by dividing by 100. This means that the value of 𝑅 is 0.165.

The interest rate was per year, and we deposited the amount for seven months. As there are 12 months in a year, the time in this case is equal to seven twelfths. We can, therefore, calculate the simple interest by multiplying 552 by 0.165 by seven twelfths. This is equal to 53.13. The amount of interest earned is 53 dollars and 13 cents.

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