Connie loaned Sam \(\$2,500\) 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 (2,500USD). 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 2,500USD to get \(\$75\).
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.