TT7 78-79

Chapter 12: Lessons 78-79

MORE Percentages IRL

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​Lesson 78

Savings accounts and interst

Interest rates

The interest rate is the amount charged on top of the principal by a lender to a borrower for the use of assets. If you borrow money from the bank, you have to pay it back with interest. However, sometimes the bank "borrows" from you!

Banks

Only a small portion of your deposits at a bank are actually held as cash at the bank. The rest of your money (the majority of the bank's assets) is invested by the bank into vehicles such as consumer or business loans, government bonds and credit cards. Borrowers have to pay the bank back with interest.
If you have a savings account with the bank, you will earn interest on that account because the bank wants you to keep your money there. The more customers the bank has, the more assets it has to create loans and other investments.

Savings and Interest

Savings accounts generate interest

A Good Bank offers 5% interest on all simple savings accounts. This interest is calculated annually (yearly). If you invest $400 in your account, how much will you have at the end of the year?

Multiple Choice

Sam mowed lawns all summer. He earned $750. He decided to open a savings account at his local bank. The account he got earns 4% interest every year. How much money will Sam have in the account at the end of the year?

• $850
• $780
• $800
• $700

Multiple Choice

If you put $930 into an account that earns 5% interest each year, how much money would you have at the end of the year?

• $900.50
• $1000.75
• $950.25
• $976.50

A Side Note:

What about after 5 years? or 10? or 20?

Compound interest

Example

Sales tax

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Lesson 79

What is it?

Sales tax is a tax some states and countries add on top of the sticker price for certain goods. Many US states have a sales tax that you need to calculate if you want to know how much you will be paying at the checkout register.

Find the tax rate

Multiple Choice

Calculate the tax rate:

Edward spent $104 at the grocery store. He paid a tax of $9.11. What was the sales tax rate?

• 6.5%
• 10%
• 5%
• 8.75%

Multiple Choice

Josie went shopping for a new camera. She spent $1,150 and paid a tax of $89.97. What was the sales tax rate?

• 5.67%
• 10.25%
• 7.82%

• 8.69%

Multiple Choice

True or false

A sales tax rate is a measure of how fast a salesperson can make you buy something.

• true

• false

Multiple Choice

You went to the shop and spent $84 on a race track for your RC car. The total amount you paid at the register was $89.46. What was the sales tax rate?

• 10%
• 6.5%
• 7%
• 4.5%

Homework

Lessons 78-79 + Chapter 12 quiz

Math lab from 2:30-3:30 in zoom