GOOD MORNING 1 Please have out your weekly

GOOD MORNING 1. Please have out your weekly homework to be stamped. 2. Please complete the next section of your SKILL BUILDER.

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MONDAY 1. You receive $2, 500 as a graduation gift and decide to deposit it in the bank at 5% simple interest for the next 25 years. How much money will you have at the end of that 25 I =years? ? p = 2500 r = 0. 05 t = 25 I = 2500 x 0. 05 x 25 I = 3, 125 + 2, 500 A = $5, 625 2. To buy a laptop computer, Michelle borrowed $2, 000 for 3 years at an annual simple interest rate of 5%. How much money will she end up paying if she pays the entire loan off at the end of the third year? I= p= r= t= ? 2000 0. 05 3 I= p= r= t= ? 30, 000 0. 055 5 I = 2000 x 0. 05 x 3 I = 300 + 2000 A = $2, 300 3. You borrow $30, 000 to buy a new car. The simple interest rate is 5 ½ % per year. Find the interest you will pay after 5 years. I = 30000 x 0. 055 x 5 I = $8, 250

CIRCUIT You have 20 minutes to complete the CIRCUIT from yesterday. When you have completed your CIRCUIT, you must bring it to me to grade. Thank you!

The difference between simple and compound interest

Simple Interest - I = Prt Interest is only earned on the principle amount. t A = P(1+r) Compound Interest - Interest is earned on the principle and the interest combined.

1. The amount paid to a depositor for keeping their money in a savings account is called: A. principle B. term C. interest D. rate 2. The _____ determines how much is paid to the depositor each year. A. principle B. term C. interest D. rate 3. The amount of the original investment is called: A. principle B. term C. interest D. rate

4. Fill-in the appropriate words below: Simple a. ) _________ interest is paid on principle only. b. ) _________ interest is paid on both principle and interest. Compound

5. The formula for simple interest is: I = Prt ____________________ 6. The formula for the ending balance on an account with simple interest is: A = P + I ____________________

7. The formula for the ending balance on an account with compound interest is: A = P(1+r)t __________________

TUESDAY 1. Carly deposited $800 in an account that earns 6% annual compounded semi-annually. Lara deposited $800 in an account that earns 6% simple interest. How much will each girl have in their account at the end of 10 years if they make so withdrawals or deposits? A B C D Carly: $1432. 68 Lara: $1280 Carly: $1444. 89 Lara: $1320 Carly: $1432. 68 Lara: $1320 2. Joseph paid $7812. 50 in interest on a loan of $50, 000 for a period of 30 months. What was the interest rate? 3. Ashley’s parents invested $15, 000 for college in an account earning simple interest. When they withdrew the investment thirteen years later, they had earned a total of $10, 725 in interest. What was the interest rate?

8. In the simple interest formula i = p x r x t a. ) What does the “p” represent? _____________ b. ) What does the “r” represent? _____________ c. ) What does the “t” represent? _____________

9. Use simple interest to find the ending balance in the examples below: a. ) $210 invested at 8% for 7 years I = 210 x 0. 08 x 7 = $117. 6+ 210 = $327. 60 b. ) $4000 invested at 3% for 4 years I = 4000 x 0. 03 x 4 = $480 + 4000 = $4, 480 c. ) $34, 000 invested at 4% for 3 years d. ) $2300 invested at 7. 5% for 10 years

10. Use compound interest to find the ending balance in the examples below: A = P(1+r)t a. ) $1, 250 invested at 8% compounded annually for 2 years A = 1250(1+0. 08)2 = $1, 458 b. ) $650 invested at 7% compounded annually for 5 years A = 650(1+0. 07)5 = $911. 66

t A = P(1+r) c. ) $10, 000 invested at 7. 8% compounded annually for 2 years d. ) $7, 500 invested at 6% compounded annually for 15 years

11. How much interest is earned on a principle of $646 invested at a simple interest rate of 5% for 10 years? 12. How much interest is earned on a principle of $646 invested at a compound interest rate of 5% compounded annually for 10 years?

13. Does the amount of interest earned each year increase, decrease, or stay the same in a simple interest account? …in a compound interest account? Explain your answers. ___________________________________________________________