Connie loaned Sam $500 at a yearly interest rate of 3%. After one year what is the interest owed on this loan?
The yearly interest charged on this loan is the annual interest rate (3%) multiplied by the amount borrowed ($500). To get the interest charged first convert the
interest rate from a percentage to a decimal by dividing by 100 (3 / 100) to get 0.03 then multiply 0.03 by $500 to get $15.
When you’re dealing with percentages you’ll always need to convert the percent to a decimal by dividing by 100 before doing any calculations with it.