Lesson 31 Section 2

BANKING PROBLEMS

2. In a banking problem, what is the Amount and what is the

Base?

The Amount is the amount of interest the bank pays you

2.
when you make a deposit into an interest-bearing account.

The deposit is the Base.

The Interest is a Percent of the Deposit

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.

Example 2. Harriet wants to earn $130 in interest. The bank is paying 3%

interest. How much should she deposit?
Solution. $130 is 3% of what deposit -- of what Base?
With a calculator, press

1303.25%

See the answer:

4000

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

PERCENT INCREASE OR DECREASE

PROBLEMS (2)

12. Write the three rules which relate the Amount, the Base, and the
12. Percent.
Amount = Base Percent

Base = Amount Percent

Percent = Amount Base

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

15. Harold deposited $1,250 in a bank where the rate of interest is 3%

15. annually. In one year, how much interest will he earn? $37.50

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

19. Jason received an interest payment of $137.50 from a deposit of

19. $2500. What was the rate of interest? 5.5%

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

Base = Amount Percent

Percent = Amount Base

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

15. Harold deposited $1,250 in a bank where the rate of interest is 3%

15. annually. In one year, how much interest will he earn? $37.50

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

19. Jason received an interest payment of $137.50 from a deposit of

19. $2500. What was the rate of interest? 5.5%
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
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%