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Main Idea and New Vocabulary

NGSSS

Example 1:Find Simple Interest

Example 2:Find the Interest Rate

Example 3:Find the Total Amount

Five-Minute Check

- Solve problems involving simple and compound interest.

- interest
- simple interest
- principal
- compound interest

MA.8.A.6.4 Perform operations on real numbers (including integer exponents, radicals,percents, scientific notation, absolute value, rational numbers, and irrational numbers) using multi-step and real world problems.

Find Simple Interest

Find the simple interest for $2,000 invested in a savings account at 5.5% for 4 years.

I = prtWrite the simple interest formula.

I = 2,000● 0.055● 4Replace p with 2,000, r with 0.055, and t with 4.

I = 440

Answer: The simple interest is $440.

Find the simple interest for $980 invested in a savings account at 4.5% for 3 years.

A.$44.10

B.$132.30

C.$1,112.30

D.$1,323.00

Find the Interest Rate

LOANS Callie borrowed $4,500 from a bank to pay part of her college tuition. She will repay the loan by paying $120 a month for the next four years. Find the simple interest rate of the loan.

First find the total that Callie will pay.

$120 ● 48 = $5,760 4 years = 48 months

She will pay $5,760 – $4,500 or $1,260 in interest. So, I = 1,260.

1,260

Divide each side by 18,000.

Find the Interest Rate

I= prtWrite the simple interest formula.

1,260= 4,500● r ● 4Replace I with 1,260, p with 4,500, and t with 4.

1,260= 18,000r Simplify.

0.07= rSimplify.

Answer: The simple interest rate is 0.07 or 7%.

LOANS Samantha borrowed $7,200 from a bank to pay for a used car. She will repay the loan by paying $236 a month for the next three years. Find the simple interest rate of the loan.

A.1.18%

B.6%

C.6.6%

D.18%

Find the Total Amount

SAVINGS How much money is in an account where $80 is invested at an interest rate of 6% compounded annually for 3 years?

Find the amount of money in the account at the end of the year 1.

I= prtWrite the simple interest formula.

I= 80● 0.06● 1Substitution

I= 4.8 Simplify.

80 + 4.80 = 84.80 Add the amount invested and the interest.

Find the Total Amount

Find the amount of money in the account at the end of year 2.

I= prtWrite the simple interest formula.

I= 84.80● 0.06● 1Substitution

I= 5.088Simplify.

84.80 + 5.09 = 89.89 Add the amount invested and the interest.

Find the Total Amount

Find the amount of money in the account at the end of year 3.

I= prtWrite the simple interest formula.

I= 89.89● 0.06● 1Substitution

I= 5.3934Simplify.

Answer:After 3 years there is $89.89 + $5.39 or $95.28.

SAVINGS How much money is in an account where $310 is invested at an interest rate of 5.5% compounded annually for 3 years?

A.$327.05

B.$345.04

C.$361.15

D.$364.02

Find the simple interest to the nearest cent.$300 at 4% for 2 years

A.$8.00

B.$12.00

C.$24.00

D.$240.00

Find the simple interest to the nearest cent.$750 at 6.25% for 6 months

A.$23.44

B.$37.50

C.$46.88

D.$234.38

Find the total amount in the account to the nearest cent if the interest is compounded annually.$1,250 at 7% for 2 years

A.$1,337.50

B.$1,425.00

C.$1,431.13

D.$2,675.00

Find the total amount in the account to the nearest cent if the interest is compounded annually.$600 at 4.75% for 18 months

A.$628.50

B.$642.75

C.$643.43

D.$942.75

Sam borrowed $5,000 at 11% simple interest for two years. He made no payments during those two years. How much interest is owed at the end of those two years?

A.$110.00

B.$550.00

C.$610.50

D.$1,100.00

Anna decided to invest $1,500 at 2.5% simple interest for six months. How much interest does her investment earn?

A.$18.75

B.$37.50

C.$187.50

D.$225.00