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Example 8-3d Objective Solve problems involving simple interest

Example 8-3d Vocabulary Interest The amount of money paid or earned for the use of money

Example 8-3d Vocabulary Principal The amount of money invested or borrowed

Lesson 8 Contents Example 1Find Simple Interest Example 2Find the Total Amount Example 3Find the Interest Rate

Example 8-1a Find the simple interest for $2,000 invested at 5.5% for 4 years. Write the simple interest formula. 1/3 Replace p with amount invested I = 2,000 Replace r with rate which is in % I = 2,000  5.5% Replace t with time in years I = 2,000  5.5%  4 Use calculator to solve

Example 8-1a Find the simple interest for $2,000 invested at 5.5% for 4 years. Enter 2,000 Answer: I = $440 1/3 I = 2,000 I = 2,000  5.5%I = 2,000  5.5%  4 2, Enter multiplication sign   Enter 5.5 Enter % % Enter multiplication sign   Enter 4 Enter = = I = 440 Add dimensional analysis I = $440

Example 8-1b Find the simple interest for $1,500 invested at 5% for 3 years. Answer: I = $225 1/3

Example 8-2a Find the total amount of money in an account where $80 is invested at 6% for 6 months. 2/3 Total Amount = Interest + principle Find the total amount of money Write the interest formula Replace p with amount invested I = 80 Replace r with rate which is % I = 80  5.5% Replace t with time in years I = 80  5.5%  Time is given in months and must have years so put over denominator of 12 (12 months in a year) 6 12

Example 8-2a Find the total amount of money in an account where $80 is invested at 6% for 6 months. 2/3 Solve using a calculator Find the total amount of money I = 80 I = 80  5.5%I = 80  5.5%  6 12 I = $2.40 Remember: Must find total amount by adding the interest to the principle Total = Principle + Interest Replace principle with 80 Total = 80 Replace interest with 2.40 Total = Add Total = Add dimensional analysis Total = $82.40 Answer: Total = $82.40

Example 8-2d Answer: Find the total amount of money in an account where $60 is invested at 8% for 3 months. Total = $ /3

Example 8-3a LOANS Gerardo borrowed $4,500 from his bank for home improvements. He will pay $1,260 interest for the next four years. Find the simple interest rate of the loan. 3/3 Write the simple interest formula. Replace I with interest paid 1,260 Replace p with amount borrowed 1,260 = 4,500 Define the variable for the rate Find the simple interest rate 1,260 = 4,500  r Replace t with time in years 1,260 = 4,500  r  4 Combine “like” terms Commutative Property of Multiplication allows changing order when multiplying 4,500  r  4 1,260 = 18,000  r

Example 8-3a LOANS Gerardo borrowed $4,500 from his bank for home improvements. He will pay $1,260 interest for the next four years. Find the simple interest rate of the loan. 3/3 Ask “what is being done to the variable?” 1,260 1,260 = 4,500 Find the simple interest rate 1,260 = 4,500  r1,260 = 4,500  r  4 4,500  r  4 1,260 = 18,000  r The variable is being multiplied by 18,000 Do the inverse on both sides of the equal sign

Example 8-3a LOANS Gerardo borrowed $4,500 from his bank for home improvements. He will pay $1,260 interest for the next four years. Find the simple interest rate of the loan. 3/3 Bring down 1,260 = 18,000  r 1,260 1,260 = 4,500 Find the simple interest rate 1,260 = 4,500  r1,260 = 4,500  r  4 4,500  r  4 1,260 = 18,000  r Using the fraction bar, divide both sides by 18,000 18,000 Combine “like” terms = 1  r Use Identify Property to multiply 1  r 0.07 = r

Example 8-3a LOANS Gerardo borrowed $4,500 from his bank for home improvements. He will pay $1,260 interest for the next four years. Find the simple interest rate of the loan. 3/3 Find the simple interest rate 1,260 = 4,500  r  4 1,260 = 18,000  r 18,000 7% = rate 0.07 = 1  r 0.07 = r Remember: Rate is a % so multiply by 100 and add % sign Answer:

Example 8-3d LOANS Jocelyn borrowed $3,600 from her bank for home improvements. She will repay the loan by paying $90 a month for the next five years. Find the simple interest rate of the loan. Answer: Rate = 10% * 3/3

End of Lesson 8 Assignment Lesson 5:8Simple Interest All