Solution to Yesterday’s Interest Rate Question

Interest Rate Problem Solution

Yesterday I posted a question about interest rate which is a topic I cover in my ASVAB prep course.  In my book entitled, The ASVAB Tutor’s Arithmetic Reasoning Study Guide, I devote a section to interest rate.  In order to solve an interest rate problem, I tell my students of the importance of knowing the interest formula.  Knowing the necessary formulas for the ASVAB will help to improve your math score.  The interest formula is:

Interest = principal x rate x time.

I = p x r x t

In this example, the principal is $500, the rate is 4% which converts to .04, and the time is 3 years.

I = 500 x .04 x 3

I = 1500 x .04 = $60.

The final answer is $60.

How did you do in solving this problem?