1. Splash Screen

2. Five-Minute Check (over Lesson 7–6) Then/Now New Vocabulary
Example 1: Find Simple Interest
Example 2: Real-World Example: Find the Interest Rate
Example 3: Find the Total Amount
Lesson Menu

3. Solve compound interest problems.
You have already solved problems using the percent equation. (Lesson 7–5)
Solve simple interest problems and apply the simple interest equation to real-world problems.
Solve compound interest problems.
Then/Now

4. interest
simple interest
principal
compound interest
Vocabulary

5. A. Find the simple interest for $2000 invested at 2.5% for 3 years.
Find Simple Interest
A. Find the simple interest for $2000 invested at 2.5% for 3 years.
I = prt Write the simple interest formula.
I = 2000 ● ● 3 Replace p with 2000, r with , and t with 3.
I = 150 Simplify.
Answer: The simple interest is $150.
Example 1A

6. B. Find the simple interest for $4500 invested at 4.25% for 2 years.
Find Simple Interest
B. Find the simple interest for $4500 invested at 4.25% for 2 years.
I = prt Write the simple interest formula.
I = 4500 ● ● 2 Replace p with 4500, r with , and t with 2.
I = Simplify.
Answer: The simple interest is $
Example 1B

7. A. What is the simple interest for $3000 invested at 3.5% for 2 years?
B. $150
C. $210
D. $350
Example 1A

8. B. What is the simple interest for $2500 invested at 2.75% for 4 years?
C. $302.75
D. $412.50
Example 1B

9. Understand You need to find the simple interest rate.
Find the Interest Rate
SWIMMING POOL Mr. Webster borrowed $1280 to buy a new swimming pool. He will pay $57.60 each month for the next 24 months. Find the simple interest rate for his loan.
Understand You need to find the simple interest rate.
Plan Use the formula I = prt.
Solve First, find the amount of interest he will pay over 24 months.
24 ● $57.60 = $ Multiply to find the total amount.
Example 2

10. $1382.40 – $1280 = $102.40 Subtract to find the interest.
Find the Interest Rate
$ – $1280 = $ Subtract to find the interest.
The principal is $1280. So, p = 1280.
The loan will be for 24 months or 2 years, so t = 2.
I = prt Write the simple interest formula.
= 1280 ● r ● 2 Replace I with , p with 1280, and t with 2.
= 2560r Simplify.
Example 2

11. Answer: The simple interest rate is 0.04 or 4%.
Find the Interest Rate
Divide each side by 2560.
0.04 = r
Answer: The simple interest rate is 0.04 or 4%.
Check Use the formula I = prt. $1280 ● 0.04 ● 2 = $102.40 
Example 2

12. Mrs. Wymer borrowed $5100 to remodel her kitchen
Mrs. Wymer borrowed $5100 to remodel her kitchen. She will pay $238 a month each month for the next 24 months. What is the simple interest rate for the loan?
A. 4.5%
B. 5%
C. 5.5%
D. 6%
Example 2

13. I = prt Write the simple interest formula.
Find the Total Amount
What is the total amount of money in an account where $800 is invested at an interest rate of 6.25% compounded annually for 2 years?
Step 1 Find the amount of money in the account at the end of the first year.
I = prt Write the simple interest formula.
I = 800 ● ● 1 Replace p with 800, r with , and t with 1.
I = 50 Simplify.
Example 3

14. 800 + 50 = 850 Add the amount invested and the interest.
Find the Total Amount
= 850 Add the amount invested and the interest.
At the end of the first year, there is $850 in the account.
Step 2 Find the amount of money in the account at the end of the second year.
I = prt Write the simple interest formula.
I = 850 ● ● 1 Replace p with 850, r with , and t with 1.
Example 3

15. Find the Total Amount
I = Simplify.
Answer: So, the amount in the account after 2 years is or $
Example 3

16. What is the total amount of money in an account where $1000 is invested at an interest rate of 3.5% compounded annually for 2 years?
A. $
B. $
C. $
D. $
Example 3

17. End of the Lesson