Simple Interest by L. G. Paap

Review and Herald Publishing Association · Takoma Park Station, Washington, D. C. · Mar 12, 1908

Simple Interest

By L. G. Paap

AMONG mathematicians it is a well-known fact that any sum put out on interest at 6% will double itself in 200 months, or 16 years and 8 months. For instance, the interest on $590 for 200 months at 6% equals $590. Using this as a basis in all simple interest problems, the work is all very easy and interesting, and when learned, is not easily forgotten, as with other methods more difficult. The method also has the advantage of being based on the decimal system, which is thoroughly scientific. A little explanation will make the method quite clear to all our teachers.

The interest on $648 for 200 months at 6% equals $648. The interest on $648 for 20 months—which is one tenth of the 200—equals $64.80, or one tenth of that for the 200 months. The interest on $648 for 2 months—which is one hundredth of 200 months, or one tenth of 20 months—equals $6.48. The interest on $648 for .2 months, or six days—which again is a decimal of the other—equals $.648. You may better understand the following simple illustration:—

Six hundred forty-eight dollars on interest for 222 months at 6%: $648.¹64.²6.³48.⁴648.

The decimal points equal respectively: ¹ equals the interest for 200 months; ² equals the interest for 20 months; ³ equals the interest for 2 months; ⁴ equals the interest for .2 month, or six days.

No trouble need be experienced in finding the interest for any other rate. For instance, at 7%, divide by 6 and add; for 4%, divide by 3 and subtract from that at 6%, or multiply by 2. The apt individual will devise numerous ways, and, in fact, it adds zest to see how simply a problem may be worked at any rate.

As an illustration, to find the interest on $480 for 4 years, 2 months, 12 days, at 7½%, you see at a glance that 50 months equals one fourth of the 200 months, so $480 ÷ 4 = $120, the interest for 50 months, or 4 years and 2 months; 12 days equals two times six; but the interest for six days equals $.480 so the interest for 12 days equals $.480 times 2, or $.960; $120 + $.960 = $120.96, the interest at 6%. But 7½ is 5/4 of 6, therefore divide by 4 and multiply by 5, and you have the interest for 4 years, 2 months, 12 days, on $480: $120.96 ÷ 4 × 5 = $151.20.

In all problems reduce the years to months, and then find some fraction of 200, 20, 2, or 6 days.

This system once taught, displaces all others. Any wishing help on the method, please send a number of problems worked out to the undersigned, at Cottage Grove, Ore., and corrections will gladly be made, and suggestions offered privately.

L. G. PAAP.