Add and Minus is with an accountant today at Dash for Cash Credit Union. All the bankers are pacing in hallway carrying a stack of paperwork. "Hello guys, what can I do for you?" She asks them politely. "Mam, what's a simple interest?" Add slaps his forehead. "Well, a simple interest is an interest paid only on the original principal. We are still using the interest equation what add was talking about, but there is something you know. New balance equals the previous balance plus the interest. For example, you deposit $500 into your savings account on November 1, 2016. The account's annual interest rate is 4%. On March 1, 2017, you deposit another $200. Find the balance in the account on July 1, 2017." Add asks  Minus and said, "What's the first time period?" "Uh, does anybody have a pencil and a sheet of paper? I can't do this all in my head." "Sure, I would be glad to help you out." Here's the problem what Minus wrote.

 

 

 

From November 1 to March 1 equals 4 months. "Ok, how much interest have you earned on March 1? " Add asked.

500 x  .04 x 4 divided by 12 equals 6.67.

 

"What is your balance, including your deposit, on March 1?" Add asked.

500 plus 6.67 equals $706.67.

 

"Now you have to find the second time period."

March 1 to June 30 equals 4 months.

 

"How much interest have you earned during the second time period?" The accountant asked.

706.67 x .04 x 4 divided by 12 equals $9.42.

 

"What is your balance on July 1?" The accountant period.

706.67 plus 9.42 equals $716.09.

 

 

"Now you have learned your lesson, can we put the money in before it's too late?" Add pleased him. "Sure, this time don't be spend on buying food everyday." Minus said in an agreement. "Hey, you don't even know what's a simple interest." The two goes on and on about the disagreements. The accountant turned her face back to work while they're still arguing.