2/4/14 “Savings Accounts” 1.Of the two savings accounts your researched, which had the higher interest rate (APY) & what was it? 2.If you had $10,000 in.

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2/4/14 “Savings Accounts” 1.Of the two savings accounts your researched, which had the higher interest rate (APY) & what was it? 2.If you had $10,000 in your account, how much interest would you earn on your balance in one year from this account? On desk: Savings Account wksht.

2/4/14 Econ. Agenda 1.Simple interest (class notes) 2.Simple interest problems HW: Finish Simple Interest problems #1- 15

2/4/13Class Notes – Simple interest Interest: (can be good or bad  ) 1.Amount of money YOU PAY to borrow money 2.Amount of money YOU EARN when banks borrow your money Bank pays you interest to borrow your $$ Checking + Savings accounts, retirement accounts, etc. HIGH interest rates better = Banks pay you MORE  You pay interest to the bank/govt. for borrowing their $$ Loans (college, car, home, etc.) LOW interest rates better = you pay back LESS

Which interest rate is better? Citizens Bank offers 2% interest rate on a savings account. Santander Bank offers 4% interest rate on a savings account. Circle the best interest rate!  U.S. govt. offers 3.4% interest rate for college loans. Chase bank offers 6.8% interest rate for college loans. Circle the best interest rate!

Class Notes How do I calculate how much interest I earn/pay? Simple Interest Formula =P x r x tI Ampount of Interest I earn/pay Principal (starting $$ amount) Rate of Interest (change % to decimal) 25% .25 Time (in years)

Class Notes How do I calculate my account balance if I’m earning interest? = I + P B total Balance in account Interest earned Principal (starting $$ amount)

Class Notes Changing % to decimalsChanging months to years Divide by 100 OR Move decimal point 2 units LEFT 5% = 25% = 83% = 2.5% =.33% = Divide by 12 months 24 mo. = 6 mo. = 18 mo. =

Class Notes Changing % to decimalsChanging months to years 5% = 5/100 =.05 25% = 25/100 =.25 83% = 83/100 = % = 2.5/100 = % =.33/100 = mo. = 2 years 12 mo. 6 mo. =.5 years 12 mo. 18 mo. = 1.5 years 12 mo.

I = interest earnedP = principalr = interest rate (in decimal form)t = time (in years) B = total balance I = Prt B = I + P I = Prt  P = I = Prt  r = I = Prt  t =

EXAMPLE 1 Jessica invests $725 into savings account that pays 2.3% interest. How much interest will Jessica earn after 18 months? P =r =t =I = I = ($725)(0.023)(1.5) I = $25.01 What will Jessica’s balance (B) be after 18 months? B= P + I B= $725 + $25.01 B= $750.01

If Josh earns $2715 in interest over 10 years in an account earning 3% interest, find the principal he first deposited and the amount. I = Prt  P = ($2715)/(.03)(10) P = $9050 What will Josh’s balance (B) be after 10 years? B= P + I B= $ $2715 B= $11,765 P =r =t =I =

CW/HW: finish simple interest problems #