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BANKING PROBLEMS
Example 1. Eric deposited $1200 into a savings account where the rate of interest
was 2% annually. In one year, how much interest will he earn?
Solution. The question is:
How much is 2% of $1200?
The deposit, $1200, is the Base.
Now,
1% of $1200 is $12.00. (Lesson 3, Question 7 )
Therefore, 2% is
2 12 = 24 + 6 = 30. (Lesson 26, Question 2)
He will earn $30 interest.
1303.25%
Example 3. Gerald put $800 into a CD (Certificate of Deposit) and received $42 in
interest. What was the rate of interest?
Solution. The question is:
$42 (the interest) is what percent of $800 (the deposit)?
Write the fraction
42
.
800
1
To express that as a percent, let us complete this proportion:
42 ?
= (Lesson 29, Question 2.)
800 100
To make 800 into 100, divide by 8. Divide 42 by 8 also:
"8 goes into 42 five (5) times (40) with 2 left over."
1
The rate of interest was 5 %.
4
12. Write the three rules which relate the Amount, the Base, and the
12. Percent.
Amount = Base Percent
13. To find the unknown number, multiply only to find the Amount.
Amount
14. With a calculator, how do we interpret the fraction ?
Base
Amount Base
Apply the rules to the following banking problems. To recognize which is the
Amount and which is the Base, rephrase each problem in this form:
___ is ___% of ___ ?
Written calculations
16. Irene wants to earn $300 in interest towards her vacation next year.
16. The bank is paying 6% interest. How much should she deposit?
$5,000
2
17. Jane deposited $800 and got $32 in interest. What was the rate of
17. interest? (Use the method of proportions.) 4%
18. If the bank pays 5% interest, and you deposit $2500, how much
18. money in interest will you earn? $131.25
Calculator Problems
3
20. Theresa invested $725 in a CD at 5 %. How much interest will she
4
20. earn? $41.69
3
21. If Theresa earned $725 in interest at 5 %, how much did she
4
20. deposit? $12,608.70
22. Raymond deposited $1600 into a CD, for which he got $76.50 in
22. interest. What was the rate of interest? 4.8%
3
PERCENT INCREASE OR DECREASE
ANSWERS (2)
12. Write the three rules which relate the Amount, the Base, and the
12. Percent.
Amount = Base Percent
13. To find the unknown number, multiply only to find the Amount.
Amount
14. With a calculator, how do we interpret the fraction ?
Base
Amount Base
Apply the rules to the following banking problems. To recognize which is the Amount
and which is the Base, rephrase each problem in this form:
___ is ___% of ___ ?
Written calculations
16. Irene wants to earn $300 in interest towards her vacation next year.
16. The bank is paying 6% interest. How much should she deposit?
$5,000
17. Jane deposited $800 and got $32 in interest. What was the rate of
17. interest? (Use the method of proportions.) 4%
18. If the bank pays 5% interest, and you deposit $2500, how much
18. money in interest will you earn? $131.25
3
20. Theresa invested $725 in a CD at 5 %. How much interest will she
4
20. earn? $41.69
3
21. If Theresa earned $725 in interest at 5 %, how much did she
4
4
20. deposit? $12,608.70
22. Raymond deposited $1600 into a CD, for which he got $76.50 in
22. interest. What was the rate of interest? 4.8%