Calculate Interest

2.6 Calculate Interest

Calculate the amount of interest earned or paid.

Use the formula i = prt

- Make sure the rate is in decimal form

- Make sure the time is in years

Multiple Choice

Suppose you purchase a new laptop from Best Buy that costs $1,290, but the store is offering a deal of 0% interest for 6 months. How much will you pay in interest if you pay off the laptop before the 6 months up?

• $1,290

• $645

• $0

Multiple Choice

Calculate the simple interest of a $3,000 loan with an interest rate of 3% per year. The duration of the loan is 5 years.

• $450

• $600

• $750

Fill in the Blank

You purchase a house for $190,950 with a 15 year loan. How much interest will you pay if you get an interest rate of 3.5% from the bank?

Multiple Choice

Calculate the annual amount of interest you will earn on the $5,000 you have in a savings account when you earn 2.5% interest per year.

• $200

• $150

• $125

Multiple Choice

Stephanie has $10,000 in a savings account that earns 1.75% annually. How much interest will she earn after 4 years?

• $1,750

• $700

• $7000

Multiple Choice

You take out a loan on the mattress you purchased from Mattress Firm. If the mattress cost $5,670 and the interest rate is 0% for 6 months, how much will you pay in interest after 6 months?

• $34,020

• $0

• $2,835

Fill in the Blank

Your savings account at Regions Bank earns 2.5% annually. How much will you have in your account after 10 years if you started the account with $2,000?

Fill in the Blank

How much interest will you pay over 5 years if you purchase a vehicle that cost $28,990 with a 4.5% interest rate on the loan?

Multiple Choice

True or false: The higher the interest rate (%) the more you will earn or pay.

• True

• False

Multiple Choice

An amount paid (or earned) for the use of money.

• Markup

• Sales Tax

• Interest