1. 6-7 Simple Interest Warm Up Problem of the Day Lesson Presentation
Course 2
Warm Up
Problem of the Day
Lesson Presentation

2. 6-7 Simple Interest Warm Up Multiply. 1. 800  0.04  3
Course 2
6-7
Simple Interest
Warm Up
Multiply.
 0.04  3
2. 1,700  2  0.25
 0.05  4
4. 1,200  6  0.35 96
850
180
2,520

3. 6-7 Simple Interest Problem of the Day 0.75 75%
Course 2
6-7
Simple Interest
Problem of the Day
Which number does not belong in the group? % 3 4 6 8 75
1,000 75
1,000
= ; 3 40
the others equal . 4

4. 6-7 Simple Interest Learn to solve problems involving simple interest.
Course 2
6-7
Simple Interest
Learn to solve problems involving simple interest.

5. Insert Lesson Title Here
Course 2
6-7
Simple Interest
Insert Lesson Title Here
Vocabulary
interest
simple interest
principal

6. Course 2
6-7
Simple Interest
When you keep money in a savings account, your money earns interest. Interest is an amount that is collected or paid for the use of money. For example, the bank pays you interest to use your money to conduct its business. Likewise, when you borrow money from the bank, the bank collects interest on its loan to you.

7. Course 2
6-7
Simple Interest
One type of interest, called simple interest, is money paid only on the principal. The principal is the amount of money deposited or borrowed. To solve problems involving simple interest, you can use the following formula.
Rate of interest per year
(as a decimal)
Interest
I = P · r · t
Time in years that the
money earns interest
Principal

8. Additional Example 1A: Using the Simple Interest Formula
Course 2
6-7
Simple Interest
Additional Example 1A: Using the Simple Interest Formula
Find the missing value.
I =
, P = $575, r = 8%, t = 3 years
I = P · r · t
I = 575 · 0.08 · 3
Substitute. Use 0.08 for 8%.
I = $138
Multiply.
The simple interest is $

9. Additional Example 1B: Using the Simple Interest Formula
Course 2
6-7
Simple Interest
Additional Example 1B: Using the Simple Interest Formula
Find the missing value.
I = $204, P = $1,700, r =
, t = 6 years
I = P · r · t
204 = 1,700 · r · 6
Substitute.
204 = 10,200r
Multiply.
204
10,200 =
10,200r
Divide by 10,200 to isolate the variable.
0.02 = r
The interest rate is 2%

10. 6-7 Simple Interest Check It Out: Example 1A Find the missing value.
Course 2
6-7
Simple Interest
Check It Out: Example 1A
Find the missing value.
I =
, P = $525, r = 7%, t = 2 years
I = P · r · t
I = 525 · 0.07 · 2
Substitute. Use 0.07 for 7%.
I = $73.50
Multiply.
The simple interest is $73.50.

11. 6-7 Simple Interest Check It Out: Example 1B Find the missing value.
Course 2
6-7
Simple Interest
Check It Out: Example 1B
Find the missing value.
I = $600, P = $2,000, r =
, t = 3 years
I = P · r · t
600 = 2,000 · r · 3
Substitute.
600 = 6,000r
Multiply.
600
6000 =
6,000r
6,000
Divide by 6,000 to isolate the variable.
0.1 = r
The interest rate is 10%

12. Understand the Problem
Course 2
6-7
Simple Interest
Insert Lesson Title Here
Additional Example 2: Problem Solving Application
Avery deposits $6,000 in an account that earns 4% simple interest. How long will it take for his account balance to reach $6,800? 1
Understand the Problem
Rewrite the question as a statement:
• Find the number of years it will take for Avery’s account to reach $6,800.
List the important information:
• The principal is $6,000.
• The interest rate is 4%.
• His account balance will be $6,800.

13. Insert Lesson Title Here
Course 2
6-7
Simple Interest
Insert Lesson Title Here
Additional Example 2 Continued
Avery deposits $6,000 in an account that earns 4% simple interest. How long will it take for his account balance to reach $6,800? 2
Make a Plan
Avery’s account balance A includes the principal plus the interest: A = P + I. Once you solve for I, you can use I = P · r · t to find the time.

14. Additional Example 2 Continued
Course 2
6-7
Simple Interest
Additional Example 2 Continued
Solve 3
A = P + I
Substitute.
6,800 = 6,000 + I
–6,000 – 6,000
Subtract to isolate the variable.
800 = I
I = P · r · t
800 = 6,000 · 0.04 · t
Substitute. Use 0.04 for 4%.
800 = 240t
Multiply.
800
240 =
240t
Divide to isolate the variable.
3.33  t
Round to the nearest hundredth. 1 3
It will take 3
years.

15. Additional Example 2 Continued
Course 2
6-7
Simple Interest
Additional Example 2 Continued 4
Look Back 1 3
After exactly 3 years, Avery’s money will have
earned $800 in simple interest and his account
balance will be $6,800. 1 3
I = 6,000 · 0.04 · 3
= 800 1 3
So it will take 3 years to reach $6,800.

16. Understand the Problem
Course 2
6-7
Simple Interest
Insert Lesson Title Here
Check It Out: Example 2
Linda deposits $10,000 in an account that earns 8% simple interest. How long will it take for the total amount in her account to reach $12,000? 1
Understand the Problem
Rewrite the question as a statement:
• Find the number of years it will take for Linda’s account to reach $12,000.
List the important information:
• The principal is $10,000.
• The interest rate is 8%.
• Her account balance will be $12,000.

17. Insert Lesson Title Here
Course 2
6-7
Simple Interest
Insert Lesson Title Here
Check It Out: Example 2 Continued
Linda deposits $10,000 in an account that earns 8% simple interest. How long will it take for the total amount in her account to reach $12,000? 2
Make a Plan
Linda’s account balance A includes the principal plus the interest: A = P + I. Once you solve for I, you can use I = P · r · t to find the time.

18. Check It Out: Example 2 Continued
Course 2
6-7
Simple Interest
Check It Out: Example 2 Continued
Solve 3
A = P + I
Substitute.
12,000 = 10,000 + I
–10,000 –10,000
Subtract to isolate the variable.
2,000 = I
I = P · r · t
2,000 = 10,000 · 0.08 · t
Substitute. Use 0.08 for 8%.
2,000 = 800t
Multiply.
2,000
800 =
800t
Divide to isolate the variable.
2.5 = t 1 2
It will take 2
years.

19. Check It Out: Example 2 Continued
Course 2
6-7
Simple Interest
Check It Out: Example 2 Continued 4
Look Back 1 2
After exactly 2 years, Linda’s money will have
earned $2,000 in simple interest and her account
balance will be $12,000. 1 2
I = 10,000 · 0.08 · 2
= 12,000 1 2
So it will take 2 years to reach $12,000.

20. Insert Lesson Title Here
Course 2
6-7
Simple Interest
Insert Lesson Title Here
Lesson Quiz
Find each missing value.
1. I =
2. I = $18, P = $150, r =
3. I = $640, P =
4. I = $120, P = $600, r = 5% t =
, P = $800, r = 10%, t = 3 years
$240
, t = 2 years 6%
, r = 4%, t = 8 years
$2,000
4 years
5. Dennis deposits $6,000 in an account that earns
5.5% simple interest. How long will it take
before the total amount is $8,000?
a little over 6 years