Compound and Simple Interest

The simple interest formula is I=Prt.  The P represents the principle.  The principle is ___________________. 

• the amount of money borrowed or deposited
• the amount taxed
• the percent interest for this year
• the amount the bank owes you for being a customer at their bank

What is the formula for simple interest?

• A=P(1+r)^t
• I=Prt
• I=P(1+r)t
• A=Prt

I = Prt where r represents the rate.  Rates must be converted into ____ before multiplying.

• fractions
• mixed numbers
• decimals
• integers

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CCSS.HSN.Q.A.1

Ann puts $300 in a bank account earning 4% interest.  How much will she earn in interest in 1 year?

• 4
• 8
• 12
• 16

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What does P stand for in I = Prt ?

• percent
• partner
• percent change
• principal

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CCSS.HSA.CED.A.4

CCSS.HSA.SSE.A.1

What is important about how time is calculated in I= Prt ?

• it must be in months
• it must be in years
• it is not calculated

Smithville Bank is offering each of it's customers a record 3.4% interest on new savings account. If Mr. Thomas opens an account with $1,500, how much interest will he earn in 3 years?

• $15,300
• $1,530
• $153
• The answer is not shown

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CCSS.HSA.CED.A.1

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Find the compound interest:
Principal: $1735
Interest Rate: 0.8%
Time: 1 year

• $1,388
• $138.80
• $13.88
• None of the answers are correct.

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CCSS.HSA.CED.A.1

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Find the simple interest:
Principal: $6,000
Interest Rate: 5%
Time: 6 months

• $150
• $1,800
• $1,500
• $15,000

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8)  Jose wants to save money for a house and finds two accounts that pay 3% in interest.  He wants to invest $3000.  He has 2 options to invest his money. Option A is a simple interest account with a time period of 10 years. Option B is a compound interest account with a time period of 12 years.  What would be his account balance in Option B?

• $4,277.28
• $900
• $1,277.28
• $1,080

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CCSS.HSA.CED.A.1

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