Year 9B Lesson 2 Week 7

Calculate Simple
Interest & Total Amount
In Compound Interest

STS

Substitute

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

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 does he have to pay at the end of 2 years?

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?

c) How much interest will Jean have

to pay after 3 years?

d) 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 2 years?

d) Find the total amount Jean have

to pay at the end of 3 years.

b) How much interest will Jean have

to pay after 2 years?

c) How much interest will Jean havec

to pay after 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

Do Exit Ticket