PSAT Math : Monetary Percentage
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Example Questions
Example Question #1 : Interest
Ted works over the summer and makes $9 per hour. He works for 20 hours each week for 10 weeks. After paying 10% in taxes, he buys a bike for $500 and puts the rest of his money in the bank.
If Ted's bank pays 5% interest on the total sum once per year, and Ted doesn't add or remove anything from the account, how much money (rounded to the nearest cent) will Ted have in 5 years?
To start, we see that Ted works for 20 hours per week for 10 weeks. This means he works a total of 200 hours over the summer. He is paid $9 dollars each hour. Therefore he makes $9 x 200 hours = $1800 total over the summer. He then has to pay 10% in taxes, or .1 x $1800, leaving him with 
Now we have to find out how much he will have 5 years later. Since the bank pays 5% interest each year, we know that he will make 5% of what he has each year. He starts with $1,120. 5% of this value is 
This is also the same as multiplying instead by 1.05. We repeat this step 5 times, giving us:
Example Question #1 : How To Find Simple Interest
Jane borrows 
Use the simple interest formula:
Interest equals the initial amount multiplied by the annual interest rate multiplied by the number of years:
Let 
Let 
Let 
Let 
Therefore:
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