Question

Every month Lisa's savings account pays 0.063% interest on the amount in the account. I f she has $900.00 in the account at the beginning of the mounth and doesn't withdraw any of it what will the interest payment be for this month?

Answer 1

$0.57

Explanation:

You know that 0.063% = 0.00063, so the interest can be computed as ...

$900.00 × 0.00063 = 0.567

The account manager will round this to the nearest cent, so Lisa will be credited $0.57 in interest.

The interest payment this month will be 57¢.

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If you want to compute this value mentally, you can recognize that $900 is 9/10 of $1000, and that $1000 times 0.00063 moves the decimal point 3 places to make it $0.63. 9/10 of that amount is that amount less 1/10 of that amount, or $0.63 - 0.06 = $0.57.