Fractions & Decimals

Depth · one concept from first principles · step 2 of 4

Interest rate is interest over principal

Depositing 400,000400{,}000 won in a bank for one year earns 92009200 won in interest. If Sua deposits 600,000600{,}000 won in the same bank, how much can she withdraw after one year in all? (The bank's interest rate stays the same.)

Ratios
Your answer
How to solve
Strategy Analyze the Units — Find the rate once and it applies to any deposit. Then remember what is being asked -- the withdrawal is the deposit plus the interest, not the interest on its own.
1STEP 1

Find the interest rate

The rate is the interest divided by the money deposited.

9200 ÷ 400000 = 0.023
2STEP 2

Apply it to the larger deposit

The same rate applies, so multiply Sua's deposit by it.

600000 × 0.023 = 13800
3STEP 3

Add the interest to the deposit

What she withdraws is her own money back plus what it earned.

600000 + 13800 = 613800
Answer
613,800 won
Check by scaling instead: 600,000 is one and a half times 400,000, and 9200 × 1.5 = 13800 -- the same interest without ever finding the rate.
Takeaway

Find the rate once and it fits any amount -- but read carefully whether the question wants the interest or the total.

  • Find the interest rate
  • Apply it to the larger deposit
  • Add the interest to the deposit
Where next?
Level upsuggested
Write the rate as a fraction to read off both termsFind the time first, not the zigzags
Another one like thissuggested
12 practice problems
Step back and solidifysuggested
A rate is the ratio written as a numberA percent is a rate out of 100

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▶ Practice — 12 problems