1. 6-6
Simple Interest
Course 2

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

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

4. Course 2
6-6
Simple Interest
When you keep money in a savings account, your money earns interest. Interest 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.

5. Course 2
6-6
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

6. Additional Example 1A: Using the Simple Interest Formula
Course 2
6-6
Simple Interest
Additional Example 1A: Using the Simple Interest Formula
Find the missing value.
A. 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 $

7. Course 2
6-6
Simple Interest
Additional Example 1B: YOU TRY! (Do the problem alone, showing your work (what you put in the calculator)
Find the missing value.
B. I = $204, P = $1,700, r =
, t = 6 years
I = P · r · t
The interest rate is _______ %

8. Additional Example 1B: CORRECT IT!
Course 2
6-6
Simple Interest
Additional Example 1B: CORRECT IT!
Find the missing value.
B. 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%

9. 6-6 Simple Interest Try This: Example 1A Find the missing value.
Course 2
6-6
Simple Interest
Try This: Example 1A
Find the missing value.
A. I =
, P = $525, r = 7%, t = 2 years
The simple interest is $

10. Try This: Example 1A: CORRECT IT!
Course 2
6-6
Simple Interest
Try This: Example 1A: CORRECT IT!
Find the missing value.
A. 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. Understand the Problem
Course 2
6-6
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.

12. Insert Lesson Title Here
Course 2
6-6
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? 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.

13. Additional Example 2: Problem Solving Application
Course 2
6-6
Simple Interest
Additional Example 2: Problem Solving Application
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.

14. Additional Example 2: Problem Solving Application
Course 2
6-6
Simple Interest
Additional Example 2: Problem Solving Application 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.

15. Understand the Problem
Course 2
6-6
Simple Interest
Insert Lesson Title Here
Try This: Example 2: DO THIS ALONE
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: _______
• The interest rate is ______
• Her account balance will be ________

16. Understand the Problem
Course 2
6-6
Simple Interest
Insert Lesson Title Here
Try This: Example 2: DO THIS ALONE
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
6-6
Simple Interest
Insert Lesson Title Here
Try This: 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? 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. Try This: Example 2: DO THIS ALONE
Course 2
6-6
Simple Interest
Try This: Example 2: DO THIS ALONE
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
Substitute. Use 0.08 for 8%.
It will take ____
years.

19. Try This: Example 2: DO THIS ALONE
Course 2
6-6
Simple Interest
Try This: Example 2: DO THIS ALONE
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.

20. 6-6 Simple Interest Try This: Example 2 4 Look Back
Course 2
6-6
Simple Interest
Try This: Example 2 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.

21. This lesson is over….
Make sure you understand every example and vocabulary word in the lesson.
There is an extra/optional video you can watch on the class site.
Use your notes to complete activity F. This will be similar to a mini lesson quiz to make sure you know how to compute simple interest problems.