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Transparency 6. Click the mouse button or press the Space Bar to display the answers. Splash Screen. Example 6-4b. Objective. Solve problems involving simple interest. Example 6-4b. Vocabulary. Simple interest. The amount paid or earned for the use of money

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Transparency 6

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  1. Transparency 6 Click the mouse button or press the Space Bar to display the answers.

  2. Splash Screen

  3. Example 6-4b Objective Solve problems involving simple interest

  4. Example 6-4b Vocabulary Simple interest The amount paid or earned for the use of money The formula for simple interest is: Interest = Principle  Rate  Time I = prt Note: Time must be in years

  5. Example 6-4b Vocabulary Principal The amount of money deposited or invested

  6. Lesson 6 Contents Example 1Find Interest Earned Example 2Find Interest Earned Example 3Find Interest Paid on a Loan Example 4Find Total Paid on a Credit Card

  7. Example 6-1a SAVINGSBrandon 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? Write formula for interest Replace principle with $1,500 Replace rate with 4% which needs changed to a decimal Replace time with 3 years Answer: I = $180 Multiply Add dimensional analysis 1/4

  8. Example 6-1b SAVINGSCheryl opens a savings account that pays 5% simple interest. She deposits $600. How much interest will she earn in 2 years? Answer: I = $60 1/4

  9. Example 6-2a SAVINGSBrandon 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? Write formula for interest 30 Replace principle is $1,500 Replacerate is 4% which needs changed to a decimal Replacetime is 30 months which needs to be changed to years (simply put a denominator of 12) Answer: I = $150 Multiply Add dimensional analysis 2/4

  10. Example 6-2b SAVINGSMicah opens a savings account that pays 3.5% simple interest. He deposits $2,000. How much interest will he earn in 42 months? Answer: I = $245 2/4

  11. Example 6-3a LOANSLaura 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? Write formula for interest Replace principle is $2,000 Replacerate is 9% which needs changed to a decimal Replacetime is 8 months which needs to be changed to years (simply put a denominator of 12) Answer: I = $120 Multiply Add dimensional analysis 3/4

  12. Example 6-3b LOANSJuan borrowed $7,500 from the bank to purchase a used car. The interest rate is 15% per year. How much interest will he pay if it takes 2 years to repay the loan? Answer: I = $2,250 3/4

  13. Example 6-4a CREDIT CARDSAlma charged a $30 handbag on her credit card with an interest rate of 8%. If she has no other charges on the card, how much money would she owe after six months? Must find how much money Alma would owe after 6 months which means principle + interest First, find how much interest will be charged Write formula for interest 4/4

  14. Example 6-4a CREDIT CARDSAlma charged a $30 handbag on her credit card with an interest rate of 8%. If she has no other charges on the card, how much money would she owe after six months? Replace principle is $30 6 Replacerate is 8% which needs changed to a decimal I = $1.20 Replacetime is 6 months which needs to be changed to years (simply put a denominator of 12) Multiply 4/4

  15. Example 6-4a CREDIT CARDSAlma charged a $30 handbag on her credit card with an interest rate of 8%. If she has no other charges on the card, how much money would she owe after six months? Add interest to principle to find total 6 Principle is $30 Interest is $1.20 I = $1.20 Total cost = principle + interest Total cost = $30 + $1.20 Answer: Total cost = $31.20 4/4

  16. Example 6-4b * CREDIT CARDSCurtis charged a $60 power tool on his credit card with an interest rate of 19%. If he has no other charges on the card, how much money would he owe after nine months? Answer: Total cost = $68.55 4/4

  17. End of Lesson 6 Assignment

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