1. Chapter 5, section 2
Calculating interest

2. I can… Calculate interest using simple interest tables.
Calculate interest using the daily interest factor.

3. How to use a simple interest table
Most banks use computers or special calculators to find interest and calculate payment amounts on loans.
However, some lenders use interest tables as a quick reference chart.
Example 1 & 2, p. 179.
Check your understanding A, B, C, & D.

4. How do I know how much interest I’m paying per day?
You can calculate this using the daily interest factor.
Before substituting your rate into the formula you must change it to a decimal!
Daily interest factor = principal x (rate/number of days in year)
Example 3 & 4, p. 181
Check your understanding G & H