techmathii - 2.3 - interest
TRANSCRIPT
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Bell Ringer
1. Fahrenheit = 22°
2. Fahrenheit = 95°
3. Celsius = 10°
4. Celsius = 3°
C = 5/9 ( F – 32 )
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Simple InterestSimple Interest
i = i = pprrtt
Principal = original amountPrincipal = original amount
Rate = annual rate of interestRate = annual rate of interest
Time = time in yearsTime = time in years
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ExamplesExamples
i = i = pprrtt
1. Principal = $82, Rate = 11%, Time = 1 year1. Principal = $82, Rate = 11%, Time = 1 year
2. Principal = $2,322, Rate = 25%, Time = ½ year2. Principal = $2,322, Rate = 25%, Time = ½ year
3. Principal = $925, Rate = 8%, Time = ¼ year3. Principal = $925, Rate = 8%, Time = ¼ year
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You try!You try!Suppose you borrow $500 for one year at Suppose you borrow $500 for one year at
12% simple interest. Find the interest 12% simple interest. Find the interest charged using the formula i = prt. charged using the formula i = prt.
Suppose you borrow $1,200 for half of a year Suppose you borrow $1,200 for half of a year at 22% simple interest. Find the interest at 22% simple interest. Find the interest charged using the formula i = prt.charged using the formula i = prt.
Suppose you borrow $185,000 for three Suppose you borrow $185,000 for three months at 6% simple interest. Find the months at 6% simple interest. Find the interest charged using the formula i = prt.interest charged using the formula i = prt.
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Compound InterestCompound Interest
I = I = p p ( 1 + ( 1 + rr ))tt
Principal = original amountPrincipal = original amount
Rate = annual rate of interest as a decimal or Rate = annual rate of interest as a decimal or fractionfraction
Time = number of years over which the Time = number of years over which the principal earns interestprincipal earns interest
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ExamplesExamples
I = I = p p ( 1 + ( 1 + rr ))tt
4. Principal = $5004. Principal = $500
Rate = 8% compounded yearlyRate = 8% compounded yearly Time = 12 years Time = 12 years
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ExamplesExamples
I = I = p p ( 1 + ( 1 + rr ))tt
5. Principal = $7505. Principal = $750
Rate = 6.5% compounded annuallyRate = 6.5% compounded annually Time = 5 years Time = 5 years
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ExamplesExamples
I = I = p p ( 1 + ( 1 + rr ))tt
6. Suppose you invest $1,000. How long will it 6. Suppose you invest $1,000. How long will it take to double your money at 6% simple take to double your money at 6% simple interest?interest?
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You try 2!You try 2!
I = I = p p ( 1 + ( 1 + rr ))tt
1. Principal = $2,0001. Principal = $2,000
Rate = 6% compounded annuallyRate = 6% compounded annually Time = 3 years Time = 3 years
2. Principal = $1,6252. Principal = $1,625
Rate = 9.5% compounded annuallyRate = 9.5% compounded annually Time = 8 years Time = 8 years
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HomeworkHomework
Interest WSInterest WS