Hui Ling deposits $2000 in a savings account that pays simple interest. She makes no deposits or withdrawals. After 4 years, she has earned $320 in interest.
- How much interest does she earn each year?
- What is the simple interest rate per year?
Need a hint?
For (a), share the total interest equally over the years. For (b), compare one year's interest with the amount deposited.
Worked answer
- (a) Interest per year: $320 ÷ 4 = $80
- (b) Rate = $80 out of $2000, so 80 ÷ 2000 = 0.04 = 4%
Answer: 4%
The mistake this question tests
Habit
Left out the units
Pupils often divide $320 by 2000 to get 0.16 and then give 16% without dividing by the 4 years first.
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See the answer →Practise PSLE percentage until the mistakes stop.
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