Click the mouse button or press the Space
Click the mouse button or press the Space Bar to display the answers.
Chapter 8 Lesson 6 Simple Interest Objective: Solve problems involving simple interest
Charlotte plans to invest $1, 000 in a certificate of deposit (CD). Below shows CD rates for one year at various banks. State Credit Union: 2. 25% First Federal Bank: 3. 1% Mountain Savings Bank: 2. 65% Valley Bank: 3. 25% Find the amount of money that Charlotte can earn in one year from the State Credit union. $22. 50
Interest The amount of money that one earns on a CD for example. Where else do we earn interest on our money?
Simple Interest The amount paid or earned for the use of money.
To find the simple interest: I = prt p: the principal: the amount of money deposited or invested r: annual interest rate written as a decimal t: amount of time that money is invested or borrowed (in YEARS)
Today’s concepts • Finding the interest earned • Finding the interest paid on a loan • Find the total paid on a credit card
FIRST FIND THE INTEREST EARNED
SAVINGS Brandon found a bank offering a certificate of deposit that pays 4% simple interest. He has $1, 500 to invest. How much interest will he earn in 3 years? Formula for simple interest Replace p with $1, 500, r with 0. 04, and t with 3. Simplify. Answer: Brandon will earn $180 in interest in 3 years.
SAVINGS Cheryl opens a savings account that pays 5% simple interest. She deposits $600. How much interest will she earn in 2 years? Answer: $60
SAVINGS Brandon found a bank offering a certificate of deposit that pays 4% simple interest. He has $1, 500 to invest. How much interest will he earn in 30 months? Write the time as years. Formula for simple interest Simplify. Answer: Brandon will earn $150 in interest in 30 months.
SAVINGS Micah opens a savings account that pays 4% simple interest. He deposits $2, 000. How much interest will he earn in 42 months? Answer: $280
Second Find the interest paid on a loan
LOANS Laura borrowed $2, 000 from her credit union to buy a computer. The interest rate is 9% per year. How much interest will she pay if it takes 8 months to repay the loan? Formula for simple interest Replace p with $2, 000, r with 0. 09, and Simplify. Answer: Laura will pay $120 in interest in 8 months.
LOANS Juan borrowed $7, 500 from the bank to purchase a used car. The interest rate is 15% per year. How much interest will he pay if it takes 2 years to repay the loan? Answer: $2, 250
THIRD Find the total paid on a credit card
CREDIT CARDS Alma charged a $30 handbag on her credit card with an interest rate of 8%. If she has no other charges on the card, how much money would she owe after six months? Formula for simple interest Replace p with $30, r with 0. 08, and t with 0. 5. Simplify. Answer: The interest owed after six months is $1. 20. So, the total amount owed would be $30 + $1. 20 or $31. 20.
CREDIT CARDS Curtis charged a $60 power tool on his credit card with an interest rate of 9%. If he has no other charges on the card, how much money would he owe after nine months? Answer: $64. 05
Textbook Work • Page 360 numbers 8 – 18 even
Homework • Sheet 8 -2 odd numbers only • Chapter 8 test Friday
- Slides: 21