Lesson 8-6 Pages 358-360

Simple Interest

Lesson Check 8-5

What you will learn!

How to solve problems involving simple interest.

Simple interestSimple interest

PrincipalPrincipal

What you really need to know!

Simple interest is the extra amount of money paid or earned for the use of money. To find simple interest I, use the formula I = prt.

What you really need to know!

Principal p is the amount of money deposited or invested. Rate r is the annual interest rate written as a decimal. Time t is the amount of time the money is invested in years.

Example 1:

Brandon found a bank offering a certificate of deposit that pays 4% simple interest. He has $1,500 to invest. How much interest will he earn in 3 years?

I = prt

I = prtI = 1,500 x .04 x 3

I = 180

$180

Example 1b:

Brandon found a bank offering a certificate of deposit that pays 4% simple interest. He has $1,500 to invest. How much interest will he earn in 30 months?

30 months = 2.5 years

I = prtI = 1,500 x .04 x 2.5

I = 150

$150

Example 2:

Laura borrowed $2,000 from her credit union to buy a computer. The interest rate is 9% per year. How much interest will she pay if it takes 8 months to repay the loan?

8 months = 2/3 of a year

I = prtI = 2,000 x .09 x 2/3

I = 120

$120

Example 3:

Alma charged a $30 handbag on her credit card with an interest rate 8%. If she has no other charges on the card, how much money would she owe after six months?

6 months = 1/2 of a year

I = prtI = 30 x .08 x 1/2

I = 1.20

$30 + 1.20 = $31.20

Page 359

Guided Practice

#’s 3-7

Pages 358-359 with someone at home and study

examples!

Read:

Homework: Page 360

#’s 8-20 all

#’s 24-29

Lesson Check Ch 8

Link to Lesson 8-6 Review Problems

Page

584

Lesson 8-6

Lesson Check Ch 8

Study Guide and Review

Pages

362-364

#’s 1-47(Odd answers in back of book)

Prepare for Test!

Page

365

#’s 1-20 Lesson Check Ch 8

A ratio that compares the change in quantity to the original amount!

I=prt

Prepare for Test!

Pages

366-367

#’s 1-16