Finding total money saved | Personal financial literacy | 4th grade math (TX TEKS) | Khan Academy

- [Instructor] We're told Lena puts $35

in her savings account
each month for nine months.

She earns $1.25 total
interest during that time.

What is the balance

in Lena's savings account
after nine months?

Pause this video, have a go at it.

Okay, so first, we just have to calculate

how much she put in and
then add the interest.

So, the amount that she
puts in is $35 per month

times nine months.

So, if we take $35 times nine months,

9 times 5 is 45,

9 times 3 is 27, plus 4 is 31.

So, that's how much she deposits,

but she also got interest on that.

So, if we then add another $1.25

so then if we add all of this together,

we're going to get $316.25

as our answer, we're done.

Now, some of you might be saying,

"What is this interest thing
and why are banks paying it?"

Well, when you put money in your bank,

well, they want you to
put money in the bank

because they can do
things with that money.

They can sometimes lend

some of that money out to other people,

and when they lend it to other people,

they make interest on that

so they are essentially paying you

to be able to lend your money out.

So, that's what interest is.

It's the bank paying you
to keep money with them

that they can just use for other things.

But that's why it's sometimes
good to keep it with a bank,

because you're not just saving directly

the money that you save,

but you're actually
earning extra money on it

for someone to be able
to keep it in the bank,

and it's oftentimes convenient and safe

to keep it in the bank.

Easy to keep track of.