6-6 simple interest course 2. learn to solve problems involving simple interest. course 2 6-6 simple...
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6-6 Simple Interest
Course 2
Learn to solve problems involving simple interest.
Course 2
6-6 Simple Interest
Vocabulary
interestsimple interestprincipal
Insert Lesson Title Here
Course 2
6-6 Simple Interest
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.
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.
I = P · r · t
Interest
Principal
Rate of interest per year(as a decimal)
Time in years that themoney earns interest
Find the missing value.
Additional Example 1A: Using the Simple Interest Formula
Course 2
6-6 Simple Interest
A. I = , P = $575, r = 8%, t = 3 years
I = P · r · t
I = 575 · 0.08 · 3
I = $138
The simple interest is $138.00.
Substitute. Use 0.08 for 8%.
Multiply.
Find the missing value.
Additional Example 1B: YOU TRY! (Do the problem alone, showing your work (what you put in the calculator)
Course 2
6-6 Simple Interest
B. I = $204, P = $1,700, r = , t = 6 years
I = P · r · t
The interest rate is _______ %
Find the missing value.
Additional Example 1B: CORRECT IT!
Course 2
6-6 Simple Interest
B. I = $204, P = $1,700, r = , t = 6 years
I = P · r · t
204 = 1,700 · r · 6
204 = 10,200r
20410,200
= 10,200r10,200
0.02 = r
The interest rate is 2%
Substitute.
Multiply.
Divide by 10,200 to isolate the variable.
Find the missing value.
Try This: Example 1A
Course 2
6-6 Simple Interest
A. I = , P = $525, r = 7%, t = 2 years
The simple interest is $
Find the missing value.
Try This: Example 1A: CORRECT IT!
Course 2
6-6 Simple Interest
A. I = , P = $525, r = 7%, t = 2 years
I = P · r · t
I = 525 · 0.07 · 2
I = $73.50
The simple interest is $73.50.
Substitute. Use 0.07 for 7%.
Multiply.
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?
Insert Lesson Title Here
Course 2
6-6 Simple Interest
11 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.
Insert Lesson Title Here
Course 2
6-6 Simple Interest
22 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.
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?
Course 2
6-6 Simple Interest
Solve33A = P + I
6,800 = 6,000 + I
800 = I
I = P · r · t800 = 6,000 · 0.04 · t800 = 240t
3.33 tIt will take 3 1
3years.
Substitute.
Subtract to isolate the variable.
Substitute. Use 0.04 for 4%.Multiply.
Divide to isolate the variable.
Round to the nearest hundredth.
Additional Example 2: Problem Solving Application
–6,000 – 6,000
800240
= 240t240
Course 2
6-6 Simple Interest
Look Back44
After exactly 3 years, Avery’s money will have earned $800 in simple interest and his account balance will be $6,800.
13
I = 6,000 · 0.04 · 3 13
= 800
So it will take 3 years to reach $6,800.13
Additional Example 2: Problem Solving Application
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?
Insert Lesson Title Here
Course 2
6-6 Simple Interest
11 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 ________
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?
Insert Lesson Title Here
Course 2
6-6 Simple Interest
11 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.
Insert Lesson Title Here
Course 2
6-6 Simple Interest
22 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.
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?
Course 2
6-6 Simple Interest
Solve33A = P + I
12,000 = 10,000 + I
2,000 = I
I = P · r · t
It will take ____ years.
Substitute.
Subtract to isolate the variable.
Substitute. Use 0.08 for 8%.
–10,000 –10,000
Try This: Example 2: DO THIS ALONE
Course 2
6-6 Simple Interest
Solve33A = P + I
12,000 = 10,000 + I
2,000 = I
I = P · r · t2,000 = 10,000 · 0.08 · t2,000 = 800t
2.5 = tIt will take 2 1
2years.
Substitute.
Subtract to isolate the variable.
Substitute. Use 0.08 for 8%.Multiply.
Divide to isolate the variable.
–10,000 –10,000
Try This: Example 2: DO THIS ALONE
2,000 800
= 800t800
Course 2
6-6 Simple Interest
Look Back44
After exactly 2 years, Linda’s money will have earned $2,000 in simple interest and her account balance will be $12,000.
12
I = 10,000 · 0.08 · 2 12
= 12,000
So it will take 2 years to reach $12,000.12
Try This: Example 2
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.