Interest (I) is an amount of money earned for using another’s money over a period of time.
Formula:
Interest (I) = Principal (P) × Rate of Interest (R) × Time (T)
I = P × R × T
Problem:
Jaypee opens a savings account in National Commercial Bank where the money earns 1.5% interest per year. If he has ₱ 7,500.00 in his account, how much interest will the money earn in one year?
Step 1: What is asked
How much interest will the money in one year.
Step 2: What is the given.
P = ₱ 7,500.00
R = 1.5%
T = 1 year
I = ?
Step 3: What is the formula.
I = P × R × T
Step 4: Solve
I = P × R × T
= ₱ 7,500 × 1.5% × 1
= ₱ 7,500 × 0.015 × 1
= ₱ 112.50
• Substitute the given.
• Change 1.5% to decimal. Then, multiply
Step 5: Answer what is asked.
The amount of interest the money will earn in one year is ₱ 112.50
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