Arithmetic Reasoning Answer
Interest rate is one of the many topics I review in my role of ASVAB tutor when I teach the subject, Arithmetic Reasoning. To review interest rate, I tell my students to review the formula for interest rate. I remind my students that it is important to be able to figure out the interest or the principal or the rate or the time. Any of these components could be missing in a question on interest rate.
Yesterday I presented a question on Arithmetic Reasoning.
The topic is interest rate.
The question is:
Jenny put $600 in the bank for 5 years and earned 3% interest.
How much interest did she earn?
- $15.00
- $18.00
- $30.00
- $90.00
To solve this problem, you need to know the formula for interest.
The formula is I = p x r x t
Interest = principle x rate x time
Principal is how much money was put into the bank.
Rate is the percent interest that was earned.
Time is the number of years the money was in the bank.
In this question, the principal is $600.
The rate is 3% which must be written as a decimal of .03.
The time is 5 years
I = p x r x t
I = 600 x .03 x 5
I = 3000 x .03 = 90.00
The interest is $90.00
The answer is Choice D. $90.00
