B1: I can calculate simple interest on a bank account.

The formula for simple interest:

I = P x R x T

Interest

Principal

RateTime

Annual Interest Rate - The percent of the principal that you earn as interest based on one year.

Time is not always exact years so we have to write fractions of a year or decimals. All decimals should be written to seven place values. Do not round.

Let’s try some!

6 months =

9 months =

15 days =

21 days =

87 days =

Example 1 :

Principal: $700Annual interest rate: 3 %What is the interest after 3 months?

I = P x R x TP = 700R= .03

T = 3/12 = .25So, I = 700 x .03 x .25 = $5.25

Example 2:

Colleen O’Rourke’s savings account : $4900 deposit at 4.25% annual interest rate for 6 months. Find the interest.

I = P x R x TP = 4900R = .0425

T = 6/12 = .5I = 4900 x .0425 x .5

I = $104.13

B1: I can calculate the simple interest on a bank account. P. 206 #1-4, #10-13