Lesson 2 Week 7 Version 2

Calculate Simple
Interest & Total Amount
In Compound Interest

STS

Substitute values into the formula TA = P(1+R)T
to find Total Amount in compound interest.

Substitute values into the formula SI = PRT to
find simple interest.

Identify and

underline

Identify and underline Principal, Rate and
Time.

Substitute

Substitute

STS

STS

STS

Money IS NOT FREE
TO BORROW

Examples

Simple interest

Jerry borrowed $4,000 for 5
years at 6% simple interest rate.
How much interest is that?

SI = PRT

Compound interest

Alex borrowed $2,000 for 2
years at 5% compound interest
rate. How much interest is
that?

TA in CI = P(1+R)T

Group Work

Simple interest

Jean has a loan of $2000. The rate of
simple interest is 8% per year.

a) How much interest will Jean have

to pay after 1 year?

b) How much interest will Jean have

to pay after 3 years?

c) Find the total amount Jean have

to pay at the end of 3 years.

Compound interest

Jean has a loan of $2000. The rate of
compound interest is 8% per year.

a) How much interest will Jean have

to pay after 1 year?

b) How much interest will Jean have

to pay after 3 years?

c) Find the total amount Jean have

to pay at the end of 3 years.

Differences BETWEEN
Simple Interest &
Compound Interest

DIFFERENCES

Simple interest

- Interest for all years is same.

- SI is smaller than CI

- Formula is SI = PRT

- Principal is the same every year

Compound interest

- Interest for all years is different

- CI is larger than SI

- Formula is P(1+R)T

- Principal is not same every year.

Amount at the end of one year is
the principal for the next year.

Classwork

- Follow STS

Try your best!