1. Applications of Percent
3.4
Applications of Percent
How do you use percents to solve problems?

2. When you keep money in a savings account, your money earns interest
When you keep money in a savings account, your money earns interest. Interest is an amount that is collected or paid for the use of money. For example, the bank pays you interest to use your money to conduct its business. Likewise, when you borrow money from the bank, the bank collects interest on its loan to you.

3. One type of interest, called simple interest, is money paid only on the principal. The principal is the amount of money deposited or borrowed. To solve problems involving simple interest, you can use the following formula.
Rate of interest per year
(as a decimal)
Interest
I = P · r · t
Time in years that the
money earns interest
Principal

4. Additional Example 1A: Using the Simple Interest Formula
Find the missing value.
I =
, P = $575, r = 8%, t = 3 years
I = P · r · t
I = 575 · 0.08 · 3
Substitute. Use 0.08 for 8%.
I = $138
Multiply.
The simple interest is $

5. Additional Example 1B: Using the Simple Interest Formula
Find the missing value.
I = $204, P = $1,700, r =
, t = 6 years
I = P · r · t
204 = 1,700 · r · 6
Substitute.
204 = 10,200r
Multiply.
204
10,200 =
10,200r
Divide by 10,200 to isolate the variable.
0.02 = r
The interest rate is 2%

6. Check It Out: Example 1A
Find the missing value.
I =
, P = $525, r = 7%, t = 2 years
I = P · r · t
I = 525 · 0.07 · 2
Substitute. Use 0.07 for 7%.
I = $73.50
Multiply.
The simple interest is $73.50.

7. Check It Out: Example 1B
Find the missing value.
I = $600, P = $2,000, r =
, t = 3 years
I = P · r · t
600 = 2,000 · r · 3
Substitute.
600 = 6,000r
Multiply.
600
6000 =
6,000r
6,000
Divide by 6,000 to isolate the variable.
0.1 = r
The interest rate is 10%

8. ADDITIONAL EXAMPLE 2
Quincy deposits $400 in a new bank account that earns 4% simple interest per year. What is the total amount in the account after 3 years?
$448

10. ADDITIONAL EXAMPLE 3
Cabrini goes out for dinner, and the price of her meal is $18. The sales tax on the meal is 6%, and she also wants to leave a 20% tip. What is the total price of the meal?
$22.68

11. 3.4 LESSON QUIZ Find the indicated percent. 1. 6% of $120 $7.20 2.
7.4.D, 7.13.E
Find the indicated percent. 1.
6% of $120
$7.20 2.
0.5% of $44
$0.22 3.
Jonah’s restaurant bill comes to $25.65, and he leaves a 15% tip. What is Jonah’s total restaurant bill?
$29.50 4.
Alicia borrowed $3,000 from the bank at a rate of 12% simple interest per year. How much interest did she pay in 4 years?
$1,440

12. Find the indicated percent.5.
Nikos finds a toy train set on sale for 20% off at a toy store. The original price was $35. Nikos must also pay 6.5% sales tax. What is the total amount Nikos must pay for the train set?
$29.82

13. How do you use percents to solve problems?
Sample answer:
You can convert percents to decimals and multiply by that decimal to find the amount of sales tax, a tip, or simple interest. You can calculate the percent of increase or decrease by dividing the amount of change by the original amount.