section 6.7 simple interest - haworth public schools...1. you put $400 into your savings account....
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March 04, 2016
Do Now # 14
Find the percent of change from 20 days to 12 days.
You estimate that the number of text messages you sent last month is 135.
When the bill comes, you find out you only sent 108 text messages. Find the percent error.
Section 6.7 Simple Interest
Do Now # 15
The original price of a t-shirt is $15. The sales price includes a 35%
discount. What is the sales price?
A store pays $15 for a baseball cap. The percent markup is 60%. What is the selling price?
March 04, 2016
Section 6.7 Simple Interest
Essential Question: How can you find the amount of simple interest earned on a savings account? How can you find the amount of interest owed on a loan?
Interest is the money ________ on a savings account or ___________ on a loan.
Principal is the amount ____________ or ______________.
Simple Interest:
The money ________ or ___________ only on the Principal.
I = Prt I is the _______________________________________
P is the _______________________________________
r is the ______________________________________
t is the _______________________________________
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Finding the Interest Earned: I = Prt
You put $500 in a savings account. The account earns 3% simple interest per year.
a.) What is the interest earned in 6 months?
b.) what is the interest earned in 3 years?
On your own.
1. You put $400 into your savings account. The account earns 2% simple interest per year. What is the interest earned after 4 years?
2. You deposit your birthday money into a saving account that earns 1% simple interest. If the money is in the savings account for 6 months how much money did you earn?
3. You deposit your $400 lottery winnings into a savings account at 1% interest for 3 months. How much interest do you earn?
On Your Own.
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To find the Ending balance:
ending balance = principal + principal(rate)(time)
You borrow $600 to buy a phone. The simple interest rate is 15%. You pay off the loan after 5 years. How much do you pay for the loan?
ending balance = principal + principal(rate)(time)
600 + 600(0.15)(5)
600 + 450
1050
So, you pay $1050 for the loan.
On your own.
4. You deposit $500 in your savings account that earns 2% interest for 4 years. What is your ending balance after the 4 years?
5. You deposit $600 in a savings account that earns 4% interest. After 5 years, how much interest does the account earn?
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Finding the Annual interest rate: I= Prt
You put $1000 in an account. The account earns $100 simple interest in 4 years.
What is the annual interest rate?
On your Own.
6. You put $1500 in a savings account. The account earns $225 simple interest in 5 years.
What is the interest rate?
On Your own.
7. You put $3000 in an account. The account earns $180 simple interest in 3 years. What is the annual interest rate?
8. You had a small personal loan for $800. You paid the loan back plus $192 in interest in three years. What was the simple interest rate on the loan?
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Finding the amount of Time
A bank offers three savings accounts. The simple interest rate is determined by the principal. how long does it take an account with a principal of $800 to earn $100 in interest?
Balance Interest Rate
< $500 1.5%
$500-$5000 2.0%
> $5000 3.0%
On your Own:
9. You have a savings account and you deposit $1250. The account earns 2% simple interest per year. How long does it take to earn $125 in interest?
10. You took out a car loan for $3500 at 8.5% interest rate. If the total interest you paid was $1785. How long did it take you to pay off the car loan?
March 04, 2016
Finding the amount paid on a loan
You borrow $600 to buy a new phone. The simple interest rate is 15%. You pay off the loan after 5 years. How much did you pay for the loan?
Suppose instead of paying off the loan for your phone in 5 years, you pay it off in 2 years. How much money did you save?
On your own
11. You borrow $4000 for a car. The simple interest rate on the loan is 7%. How much do you pay for the total loan, including interest, if the loan is for 6 years?
12. You borrow $100,000 to buy a small home. The interest rate is 4.25% and the loan is for 30 years. After the 30 years, how much do you pay for the loan?
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1. Define each variable in I = Prt
2. In each situation, tell whether you would want a higher or lower interest rate. Explain your reasoning.
a.) you borrow money:
b.) you open a savings account
3. An account earns 3% simple interest. You want to find the interest earned on $200 after 8 months. what conversion do you need to make before you can use the formula
I = Prt?
An Account earns simple interest. a.) Find the interest earned
b.) the balance of the account.
5. $1500 at 4% for 5 years 7. $1800 at 6.5% for 30 months
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An Account earns simple interest. a.) Find the interest earned
b.) the balance of the account.
9. $1675 at 4.6% for 4 years 11. $5200 at 7.36% for 54 months
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