Interest is about what happens to your money It should INTEREST you!!

What is Interest? It pays to save money (investments) The bank uses your money and pays you for that use – the bank pays you interest It costs to borrow money (loans) You pay for the use of borrowed money – you pay interest The interest is usually a percentage of the sum invested or borrowed called the interest rate (ex. 5% per annum or p.a.)

L.O. To be able to find the Simple Interest By the end of the lesson, we will be able to: understand what interest is understand what simple interest is understand the formula to find the simple interest after a number of years use the formula to find the simple interest

Simple Interest There are 2 ways to calculate Simple Interest.. Interest calculated on principal amount ONLY – fixed rate on principal – simple interest remains the same every year: There are 2 ways to calculate Simple Interest..

Simple Interest Sally deposits €600 into an account with a rate of 5% per annum simple interest. Calculate the interest Sally receives in 5 years. Method 1: Simple Reasoning 5% of €600 for 5 years 𝟓 𝟏𝟎𝟎 ×𝟔𝟎𝟎×𝟓=€𝟏𝟓𝟎 Method 2: Simple Interest Formula S.I. = P x T x R 600 x 5 x 𝟓 𝟏𝟎𝟎 =€𝟏𝟓𝟎

I = €450 Interest paid by bank is unknown I = PTR Principal (invested) A savings account is set up so that the simple interest earned on the investment is moved into a separate account at the end of each year. If an investment of €5,000 is invested at 4.5%, what is the total simple interest accumulated in the checking account after 2 years. Interest paid by bank is unknown Principal (invested) Rate Time is 2 years Multiply I = PTR I = I = €450 5,000 x 0.045 x 2

I = PTR I = I = €1575 Interest paid by bank is unknown A savings account is set up so that the simple interest earned on the investment is moved into a separate account at the end of each year. If an investment of €7,000 is invested at 7.5%, what is the total simple interest accumulated in the checking account after 3 years. Interest paid by bank is unknown Principal (invested) Rate Time is 3 years Multiply I = PTR I = I = €1575 7,000 x 0.075 x 3

Simple Interest Worksheet