1. Calculating Interest Interest = the cost of ___________
Simple Interest:
only uses the original _____________amount to determine interest
formula to determine interest:
Interest = Principal • Rate • Time
Principal = ____________ amount borrowed
rate = interest rate expressed as a ___________
time = number of __________ the money is being _______________

2. Determining Simple Interest Example #1
Find the interest amount on $3,000 at 8% interest for one year.
Step 1: Interest = principal • rate • time
Step 2: Interest = 3,000 • .08 • 1
Convert 8% to _______ form (.08) for formula.
Step 3: Interest = $240 paid for the ______ of $3,000 for one __________.

3. Determining Simple Interest Example #2
Find the future value of $5,000 invested at 6% for three years using simple interest.
Step 1: Interest earned = principal • rate • _____
Step 2: Interest earned = 5,000 • .06 • 3 =$900
Convert 6% to ___________form (.06) for formula.
Step 3: Future value = interest earned + principal
FV = $900 + $5,000
FV = $____________

4. Determining Simple Interest Example #3
Find the interest on $2,000 borrowed at 9% for 73 days.
Step 1: Interest = principal • ______ • time
Step 2: Interest = 2,000 • .09 • (73/365)
Convert 9% to _______form (.09) for formula.
Convert 73 days to _________by dividing by 365 days/year.
Step 3: Interest = 2,000 × .09 × .20
Interest = $________

5. I = PRT Insert this in your notes! 10 = (200)(0.04)T 1.25 yrs = T
If you invested $ in an account that paid simple interest, find how long you’d need to leave it in at 4% interest to make $10.00.
enter in formula as a decimal
I = PRT
Insert this in your notes!
10 = (200)(0.04)T
1.25 yrs = T
Typically interest is NOT simple interest but is paid semi-annually (twice a year), quarterly (4 times per year), monthly (12 times per year), or even daily (365 times per year).