Simple Interest Simple Interest is money added onto

Simple Interest

Simple Interest is money added onto the original amount saved (earned) or borrowed (charged).

Simple Interest Formula I (Interest) - The amount earned or the amount charged p (Principal)- The amount borrowed or deposited r (Rate) – Percent at which the interest is charged t (Time)- In years or months

Calculating Simple Interest How much money would you pay in interest if you borrowed $1, 600 for 1 ½ years at 16% APR? Convert the percent to a decimal. 16% =. 16 I = prt I = $1, 600 x. 16 x 1. 5 I = $384

Shawnique bought a beautiful house for $350, 000. Her loan was for 30 years at 6. 5% APR. How much money will she end up paying in interest? 6. 5% =. 065 I = prt I = $350, 000 x. 065 x 30 I = $682, 500

Kent put $8, 500 into an 18 month CD. The interest rate is 3. 25% How much money will Kent earn in interest? 3. 25% =. 0325 I = prt I = $8, 500 x. 0325 x 1. 5 I = $414. 38

Katie bought a new sports car for $28, 500. She financed her car for 6 years at 6. 75%APR. How much will she end up paying for interest on her car? 6. 75% =. 0675 I = prt I = $28, 500 x. 0675 x 6 I = $11, 542. 50

Cody bought a new truck for $25, 000. He took out a loan for 5 ½ years with 7. 75% APR. How much will Cody end up paying in interest? 7. 75% =. 0775 I = prt I = $25, 000 x. 0775 x 5. 5 I = $10, 656. 25

Tia saved her $9, 000 for 2 ½ years at 4. 25% APR in a CD, to go on a month long vacation with her family. How much did she earn in interest? 4. 25% =. 0425 I = prt I = $9, 000 x. 0425 x 2. 5 I = $956. 25