Convert the interest rate to a decimal

Oct 13, 2025 by vinooalluri.com 75 views

The Bank Offers 4% in a Bank Account: Nathan Puts $3,800

Understanding the Problem

In this problem, we are given that a bank offers a 4% interest rate on a bank account. Nathan decides to put $3,800 into this account. The question is, how much money will Nathan have in the account after one year, considering the 4% interest rate?

Calculating the Interest

To calculate the interest earned on the account, we need to multiply the principal amount ($3,800) by the interest rate (4%). The interest rate is usually expressed as a decimal, so we need to convert 4% to a decimal by dividing it by 100.

Interest Rate as a Decimal 4% = 4 ÷ 100 = 0.04

Calculating the Interest Earned Interest = Principal × Rate = $3,800 × 0.04 = $152

Total Amount in the Account

Now that we have calculated the interest earned, we can find the total amount in the account by adding the principal amount and the interest earned.

Total Amount = Principal + Interest = $3,800 + $152 = $3,952

Conclusion

In this problem, we calculated the interest earned on a bank account with a principal amount of $3,800 and an interest rate of 4%. We found that the interest earned is $152, and the total amount in the account after one year is $3,952.

Real-World Application

This problem has real-world applications in finance and banking. It helps individuals understand how interest rates work and how they can affect the amount of money in a savings account or a loan. It also highlights the importance of considering interest rates when making financial decisions.

Mathematical Concepts

This problem involves several mathematical concepts, including:

Interest rates: The rate at which interest is earned on an account.
Principal: The initial amount of money deposited into an account.
Interest: The amount of money earned on an account over a period of time.
Decimal: A way of expressing a percentage as a fraction of 100.
Multiplication: A mathematical operation that involves finding the product of two or more numbers.

Solving Similar Problems

To solve similar problems, you can follow these steps:

Understand the problem: Read the problem carefully and identify the key elements, such as the principal amount, interest rate, and time period.
Convert the interest rate to a decimal: Divide the interest rate by 100 to convert it to a decimal.
Calculate the interest earned: Multiply the principal amount by the interest rate (in decimal form).
Calculate the total amount: Add the principal amount and the interest earned to find the total amount in the account.

Practice Problems

Try solving the following problems:

A bank account offers a 5% interest rate. If you deposit $2,000 into the account, how much money will you have after one year?
A loan has an interest rate of 6%. If you borrow $5,000 for one year, how much will you owe after one year?

Answer Key

A bank account offers a 5% interest rate. If you deposit $2,000 into the account, you will have $2,100 after one year.
A loan has an interest rate of 6%. If you borrow $5,000 for one year, you will owe $5,300 after one year.

Conclusion

In conclusion, this problem helps us understand how interest rates work and how they can affect the amount of money in a savings account or a loan. It also highlights the importance of considering interest rates when making financial decisions. By following the steps outlined in this problem, you can solve similar problems and make informed financial decisions.
The Bank Offers 4% in a Bank Account: Nathan Puts $3,800 - Q&A

Frequently Asked Questions

In this Q&A article, we will address some of the most common questions related to the problem of Nathan putting $3,800 into a bank account with a 4% interest rate.

Q: What is the interest rate on the bank account? A: The interest rate on the bank account is 4%.

Q: How much money will Nathan have in the account after one year? A: Nathan will have $3,952 in the account after one year, which is the principal amount of $3,800 plus the interest earned of $152.

Q: How is the interest rate converted to a decimal? A: The interest rate is converted to a decimal by dividing it by 100. So, 4% is converted to 0.04.

Q: What is the formula for calculating the interest earned? A: The formula for calculating the interest earned is: Interest = Principal × Rate.

Q: What is the principal amount? A: The principal amount is the initial amount of money deposited into the account, which is $3,800 in this case.

Q: What is the interest earned? A: The interest earned is the amount of money earned on the account over a period of time, which is $152 in this case.

Q: How is the total amount calculated? A: The total amount is calculated by adding the principal amount and the interest earned. So, the total amount is $3,800 + $152 = $3,952.

Q: What is the real-world application of this problem? A: This problem has real-world applications in finance and banking. It helps individuals understand how interest rates work and how they can affect the amount of money in a savings account or a loan.

Q: What mathematical concepts are involved in this problem? A: The mathematical concepts involved in this problem include interest rates, principal, interest, decimal, and multiplication.

Q: How can I solve similar problems? A: To solve similar problems, you can follow these steps:

Understand the problem and identify the key elements, such as the principal amount, interest rate, and time period.
Convert the interest rate to a decimal by dividing it by 100.
Calculate the interest earned by multiplying the principal amount by the interest rate (in decimal form).
Calculate the total amount by adding the principal amount and the interest earned.

Q: What are some practice problems that I can try? A: Here are some practice problems that you can try:

A bank account offers a 5% interest rate. If you deposit $2,000 into the account, how much money will you have after one year?
A loan has an interest rate of 6%. If you borrow $5,000 for one year, how much will you owe after one year?

Answer Key

A bank account offers a 5% interest rate. If you deposit $2,000 into the account, you will have $2,100 after one year.
A loan has an interest rate of 6%. If you borrow $5,000 for one year, you will owe $5,300 after one year.

Conclusion

In conclusion, this Q&A article provides answers to some of the most common questions related to the problem of Nathan putting $3,800 into a bank account with a 4% interest rate. By understanding the concepts involved in this problem, you can solve similar problems and make informed financial decisions.