Simple and Compound

Ivan deposits $5,000 into an account that pays simple interest at a rate of 5% per year. How much interest will he be paid in the first 3 years?

What is the principle? ​ (a)  

What is the rate? ​ (b)  

What is the time? ​ (c)  

• $5,000
• 5%
• 3 years

• $300
• 6%
• 5 years

Maria deposits $300 into an account that pays simple interest at a rate of 6% per year. How much interest will she be paid in the first 5 years?

Mathematical Equivalence

ON

Jessica borrowed $500 from a bank for 2 years and was charged simple interest. The total interest that she paid on the loan was $70. As a percentage, what was the annual interest rate of her loan?

Match the following

• time (t)

• 2

• Principle (P)

• 500

• Interest (I)

• 70

• rate (r)

• Unknown

The Henley’s took out a new home loan for $195,000 at a simple interest rate of 4.3%. How much will they pay in interest after 30 years?

• $446,550

• $2515.50

• $25,155

• $251,550

Starting money = $350. Interest rate = 2.5% TIme = 3 years. How much interest? (simple Interest)

• $7.50

• $26.25

• $87.5

• $262.50

Your 3 year investment of $20,000 received 5.2% interest compounded annually.  What is your total ?

• $23,285.05

• $3,285.05

• $2,385

• $32,285

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

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

Julie borrowed $3,500 for 3 years at 7½% simple interest rate. 
How much interest is that?

• Julie borrowed $3,500 for 3 years at 7½% simple interest rate. 
  How much interest is that?
• $787.50
• $810
• $812.50

The compound interest formula is:

A = P(1 + r)^t

What does the A represent?

• The amount of interest earned.

• The amount of time that has passed.

• The total amount of money after a certain amount of time.

• The amount required to invest.