Simple Interest

​Simple Interest

7th Math Module 2​

​Simple Interest

I = P x R x T

When in real life do we have interest with our money?​

Some text here about the topic of discussion

​Simple Interest

I = P x R x T

I= Interest earned

P= Principal: money borrowed or deposited (Starting amount)

R= Rate: Always in decimal form (7%= .07)

T= Time: Always in years (5 years = 5 or 6 months=0.5 years)​

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If you have an interest rate of 6.5%, what is the decimal form?

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If you have an interest rate of 22%, what is the decimal form?

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If you have an interest rate of 9%, what is the decimal form?

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If you borrow money for 6 months, what do you use for the fraction of years?

Multiple Choice

If you borrow money for 8 months, what do you use for your formula?

• 8

• 8/12

• 0.6

• 1.5

​Simple Interest Example

​Savings Account

​Maggie put $580 into a savings account. The account pays 2.5% simple interest each year. If she neither adds or withdraws money from the account, how much interest will she earn after two years?

Some text here about the topic of discussion

Fill in the Blanks

​Maggie put $580 into a savings account. The account pays 2.5% simple interest each year. If she neither adds or withdraws money from the account, how much interest will she earn after two years?

WHAT DO WE USE IN THE EQUATION FOR YEARS?

Fill in the Blanks

​Maggie put $580 into a savings account. The account pays 2.5% simple interest each year. If she neither adds or withdraws money from the account, how much interest will she earn after two years?

WHAT DO WE USE FOR THE RATE?

Fill in the Blanks

​Maggie put $580 into a savings account. The account pays 2.5% simple interest each year. If she neither adds or withdraws money from the account, how much interest will she earn after two years?

WHAT DO WE USE FOR THE PRINCIPAL?

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​Maggie put $580 into a savings account. The account pays 2.5% simple interest each year. If she neither adds or withdraws money from the account, how much interest will she earn after two years?

If we use the equation below, how much interest does she make?

I = 580 x 0.025 x 2

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Carrie invests $430 into a savings account. The account pays 3% simple interest on an annual basis. If she does not add or withdraw money, how much interest will she earn after 18 months?

WHAT DO WE USE FOR THE RATE?

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Carrie invests $430 into a savings account. The account pays 3% simple interest on an annual basis. If she does not add or withdraw money, how much interest will she earn after 18 months?

WHAT DO WE USE FOR THE YEARS?

Multiple Choice

Carrie invests $430 into a savings account. The account pays 3% simple interest on an annual basis. If she does not add or withdraw money, how much interest will she earn after 18 months?

WHAT EQUATIONS WORKS FOR THIS PROBLEM?

• I= 430 X 3 X 18

• I = 430 X .03 X 18

• I = 430 X .3 X 1.5

• I = 430 X .03 X 1.5

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Carrie invests $430 into a savings account. The account pays 3% simple interest on an annual basis. If she does not add or withdraw money, how much interest will she earn after 18 months?

NOW SOLVE FOR CARRIE'S INTEREST USING THE FORMULA:

I = 430 X .03 X 1.5

Multiple Choice

Rodell’s parents are starting a real estate business. They borrow $99,400 from the bank to finance their start-up operations. The simple interest rate is 4.75% per year, and they plan to take 15 years to repay the loan.

Which equation works for finding the interest on their loan?

• I = 99400 x .0475 x 15

• I = 99400 x 4.75 x 15

• I = 99400 x .475 x 1.25

• I = 99400 x .0475 x 1.25

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Rodell’s parents are starting a real estate business. They borrow $99,400 from the bank to finance their start-up operations. The simple interest rate is 4.75% per year, and they plan to take 15 years to repay the loan.

Find the interest on their loan.

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Abbie borrows $3,216 at a rate of 6.8% per year. How much simple interest will she owe if it takes 2 years to repay the loan?

Use I = P x R x T and solve for her interest. (Round to the hundredths place)

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Jeremy borrows $14,280 at a rate of 3.8% per year. How much simple interest will he owe if it takes 6 months to repay the loan?

I = P x R x T

Hint: Time in YEARS

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Harmon is depositing $5,500 into a savings account with a simple interest rate 5.4%. She plans on leaving her money in the account for 7 years, what interest will she earn on her money?

I = P x R x T

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Harmon is depositing $5,500 into a savings account with a simple interest rate 5.4%. She plans on leaving her money in the account for 7 years, what interest will she earn on her money?

I = P x R x T

NOW, What will her account be at the end of 7 years? (Hint: ADD)

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Greg is depositing $2,800 into a savings account with a simple interest rate 3.7%. He plans on leaving his money in the account for 15 months, what interest will he earn on his money?

I = P x R x T

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Greg is depositing $2,800 into a savings account with a simple interest rate 3.7%. He plans on leaving his money in the account for 15 months, what will his account be at after 15 months? (Hint: ADD)

I = P x R x T

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Monica is borrowing $9,600 for 6 years in an account that gets 3% simple interest annually. How much will she have in interest?

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Jimmy is investing $6,800 for 3 years in an account that gets 4.2% simple interest annually. How much will he have in interest after the three years?