Lesson 3 of 1524
Substituting into a formula
A formula is a sentence. Replace each letter, then calculate.
Practice this chapterLetters stand for numbers you are given. Write those numbers in place of the letters before you do the arithmetic.
Keep the operations. If two letters sit next to each other, as in Prt, that means multiply.
A rate written as a percent has to become a decimal first. In a formula, 5% is 0.05.
Simple interest
I = Prt
Interest equals principal times rate times time.
Worked example
Find I when P = 200, r = 0.05, and t = 3.
- 1I = Prt means I = P × r × t. The letters side by side are multiplication, not addition.
- 2Put the given numbers in place: I = 200 × 0.05 × 3.
- 3200 × 0.05 = 10. The 0.05 is 5%, and 5% of 200 is 10. That 10 is one year of interest.
- 4Time is 3 years, so multiply that yearly interest by 3: 10 × 3 = 30.
Result: I = 30
Why. Simple interest multiplies principal, rate, and time. The rate is already a decimal, so 5% of 200 is 10 each year, and three years make 30. Adding 200 + 0.05 + 3 would not be interest.
Do not add the numbers just because they are beside each other. Prt means multiply.
Practice margin
This chapter
A fresh set from this chapter only. Choose 10 or 20. Multiple choice and fill-in, with no repeat inside the set.