Warm Up  0.04  ,700  2   0.05  ,200  6  Course Simple Interest 2,520 Thursday February 2, 2012 Homework pg. 358# 6-13 Multiply.

Problem of the Day Which number does not belong in the group? % Course Simple Interest , ,000 = ; 3 40 the others equal. 3434

Learn to solve problems involving simple interest. Course Simple Interest 7.RP.2b-1 Identify the constant of proportionality (unit rate) in tables. EQ: Can you show how to find r if I= $10, P= $100m and t= 2 years?

Vocabulary interest simple interest principal Insert Lesson Title Here Course Simple Interest

Course Simple Interest When you keep money in a savings account, your money earns interest. Interest is an amount that is collected or paid for the use of money. For example, the bank pays you interest to use your money to conduct its business. Likewise, when you borrow money from the bank, the bank collects interest on its loan to you.

Course Simple Interest One type of interest, called simple interest, is money paid only on the principal. The principal is the amount of money deposited or borrowed. To solve problems involving simple interest, you can use the following formula. Write the Formula down and label it. I = P · r · t Interest Principal Rate of interest per year (as a decimal) Time in years that the money earns interest

Find the missing value. Additional Example 1A: Using the Simple Interest Formula Course Simple Interest I =, P = $575, r = 8%, t = 3 years I = P · r · t I = 575 · 0.08 · 3 I = $138 The simple interest is $ Substitute. Use 0.08 for 8%. Multiply.

Find the missing value. Additional Example 1B: Using the Simple Interest Formula Course Simple Interest I = $204, P = $1,700, r =, t = 6 years I = P · r · t 204 = 1,700 · r · = 10,200r ,200 = 10,200r 10, = r The interest rate is 2% Substitute. Multiply. Divide by 10,200 to isolate the variable.

Find the missing value. Check It Out: Example 1A Course Simple Interest I =, P = $525, r = 7%, t = 2 years I = P · r · t I = 525 · 0.07 · 2 I = $73.50 The simple interest is $ Substitute. Use 0.07 for 7%. Multiply.

Find the missing value. Check It Out: Example 1B:TRY THIS page158 #1 Course Simple Interest I = $600, P = $2,000, r =, t = 3 years I = P · r · t 600 = 2,000 · r · = 6,000r = 6,000r 6, = r The interest rate is 10% Substitute. Multiply. Divide by 6,000 to isolate the variable.

Additional Example 2: Problem Solving Application Avery deposits $6,000 in an account that earns 4% simple interest. How long will it take for his account balance to reach $6,800? Insert Lesson Title Here Course Simple Interest 1 Understand the Problem Rewrite the question as a statement: Find the number of years it will take for Avery’s account to reach $6,800. List the important information: The principal is $6,000. The interest rate is 4%. His account balance will be $6,800.

Insert Lesson Title Here Course Simple Interest 2 Make a Plan Avery’s account balance A includes the principal plus the interest: A = P + I. Once you solve for I, you can use I = P · r · t to find the time. Additional Example 2 Continued Avery deposits $6,000 in an account that earns 4% simple interest. How long will it take for his account balance to reach $6,800?

Course Simple Interest Solve 3 A = P + I 6,800 = 6,000 + I 800 = I I = P · r · t 800 = 6,000 · 0.04 · t 800 = 240t 3.33  t It will take years. Substitute. Subtract to isolate the variable. Substitute. Use 0.04 for 4%. Multiply. Divide to isolate the variable. Round to the nearest hundredth. –6,000 – 6, = 240t 240 Additional Example 2 Continued

Course Simple Interest Look Back 4 After exactly 3 years, Avery’s money will have earned $800 in simple interest and his account balance will be $6, I = 6,000 · 0.04 · = 800 So it will take 3 years to reach $6, Additional Example 2 Continued

Check It Out: Example 2 TRY THIS pg 158 #2 Linda deposits $10,000 in an account that earns 8% simple interest. How long will it take for the total amount in her account to reach $12,000? Insert Lesson Title Here Course Simple Interest 1 Understand the Problem Rewrite the question as a statement: Find the number of years it will take for Linda’s account to reach $12,000. List the important information: The principal is $10,000. The interest rate is 8%. Her account balance will be $12,000.

Insert Lesson Title Here Course Simple Interest 2 Make a Plan Linda’s account balance A includes the principal plus the interest: A = P + I. Once you solve for I, you can use I = P · r · t to find the time. Check It Out: Example 2 Continued Linda deposits $10,000 in an account that earns 8% simple interest. How long will it take for the total amount in her account to reach $12,000?

Course Simple Interest Solve 3 A = P + I 12,000 = 10,000 + I 2,000 = I I = P · r · t 2,000 = 10,000 · 0.08 · t 2,000 = 800t 2.5 = t It will take years. Substitute. Subtract to isolate the variable. Substitute. Use 0.08 for 8%. Multiply. Divide to isolate the variable. –10,000 2, = 800t 800 Check It Out: Example 2 Continued

Course Simple Interest Look Back 4 After exactly 2 years, Linda’s money will have earned $2,000 in simple interest and her account balance will be $12, I = 10,000 · 0.08 · = 12,000 So it will take 2 years to reach $12, Check It Out: Example 2 Continued

Lesson Quiz Find each missing value. 1. I = 2. I = $18, P = $150, r = 3. I = $640, P = 4. I = $120, P = $600, r = 5% t = 6% $240 Insert Lesson Title Here $2,000 4 years Course Simple Interest, P = $800, r = 10%, t = 3 years, t = 2 years, r = 4%, t = 8 years 5. Dennis deposits $6,000 in an account that earns 5.5% simple interest. How long will it take before the total amount is $8,000? a little over 6 years

Learn to solve problems involving simple interest. Course Simple Interest 7.RP.2b-1 Identify the constant of proportionality (unit rate) in tables. EQ: Can you show how to find r if I= $10, P= $100m and t= 2 years?