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Simple Interest

Here is a mini task I created: If $400 was invested at 6% annual interest and earned $24 in interest after 9 months, find the principal amount, rate, interest, and time. * I = PRT * $24 = P(R)(T/12) * $24 = $400(0.06)(9/12) * $24 = $200R * R = $24/$200 = 0.12 = 12% Therefore: Principal = $400 Rate = 12% Interest = $24 Time = 9 months

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107 views12 pages

Simple Interest

Here is a mini task I created: If $400 was invested at 6% annual interest and earned $24 in interest after 9 months, find the principal amount, rate, interest, and time. * I = PRT * $24 = P(R)(T/12) * $24 = $400(0.06)(9/12) * $24 = $200R * R = $24/$200 = 0.12 = 12% Therefore: Principal = $400 Rate = 12% Interest = $24 Time = 9 months

Uploaded by

omg
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Simple Interest

Formula
I = PRT
I = PRT
• I = interest earned (amount of money the
bank pays you)
• P = Principle amount invested or
borrowed.
• R = Interest Rate usually given as a
percent (must changed to decimal before
plugging it into formula)
• T = Time (must be measured in years) or
converted to years by dividing by 12 months or
by dividing by 360 days
I = PRT
Solve for one of variables:
• Solving for I • Solving for other
• Plug in numbers for variables
P, R, & T. • Plug in what you
• Then multiply know.
• Multiply the
numbers that are
on same side then
divide by that
answer.
1. A savings account is set up so that the simple
interest earned on the investment is moved into a
separate account at the end of each year. If an
investment of 5,000 is invested at 4.5%, what is the
total simple interest accumulated in the checking
account after 2 years.

• I = PRT • Interest paid by bank


• I= (5,000)(.045)(2) is unknown
• I=450 • Principle (invested)
• Rate changed to
decimal
• Time is 2 years
• Multiply
2. A savings account is set up so that the simple
interest earned on the investment is moved into a
separate account at the end of each year. If an
investment of 7,000 is invested at 7.5%, what is the
total simple interest accumulated in the checking
account after 3 years.

• I = PRT • Interest paid by bank


is unknown
• I= (7,000)(.075)(3)
• Principle (invested)
• I=1575
• Rate changed to
decimal
• Time is 3 years
• Multiply
3. When invested at an annual interest rate
of 6% an account earned 180.00 of simple
interest in one year. How much money was
originally invested in account?
• Interest paid by
bank
• I = PRT
• Principle (invested)
• 180= P (.06) (1) is unknown
• 180 = .06P • Rate changed to
.06 .06 decimal
3,000 = P • Time is 1 year
• Multiply
• Divide
4. When invested at an annual interest rate
of 7% an account earned 581.00 of simple
interest in one year. How much money was
originally invested in account?
• Interest paid by
bank
• I = PRT
• Principle (invested)
• 581= P (.07) (1) is unknown
• 581 = .07P • Rate changed to
.07 .07 decimal
8,300 =P • Time is 1 year
• Multiply
• Divide
5. A savings account is set up so that the simple
interest earned on the investment is moved into a
separate account at the end of each year. If an
investment of 7,000 accumulate 910 of interest in
the account after 2 years, what was the annual
simple interest rate on the savings account?

• I = PRT • Interest paid by bank


• 910=(7,000)(R)(2) • Principle (invested)
• 910 = (7,000)(2)R • Rate is unknown
• 910 = 14,000 R • Time is 2 years
14,000 14,000 • Regroup & Multiply
0.065 = R • Divide
6.5% = R • Change to %
A savings account is set up so that the simple
6.
interest earned on the investment is moved into a
separate account at the end of each year. If an
investment of 2,000 accumulate 360 of interest in
the account after 4 years, what was the annual
simple interest rate on the savings account?

• I = PRT • Interest paid by bank


• 360=(2,000)(R)(4) • Principle (invested)
• 360 = (2,000)(4)R • Rate is unknown
• 360 = 8,000 R • Time is 4 years
8,000 8,000 • Regroup & Multiply
0.045 = R • Divide
4.5% = R • Change to %
7. Sylvia bought a 6-month 1900 certificate
of deposit. At the end of 6 months, she
received a 209 simple interest. What rate of
interest did the certificate pay?
• Interest paid by
• I=PRT bank
209= 1900 (R) (6/12) • Principle (invested)
209=(1900)(6/12)R • Rate is unknown
209=950R • Time is 6 months
950 950 (divide by 12)
0.22 = R • Regroup & Multiply
22% = R • Divide
• Change to %
8. I earned 75 of interest over 5 years
with a rate of 3%. How much money
did I initially deposit?
• Interest paid by
•I=PRT bank - 75
• 75=(X)(.03)(5)• Principle (invested)
75=0.15X unknown
• Rate is .03
X = 500 • Time is 5 years

500 will be initially deposited.


Mini Task
• For 10 minutes, create your own
example of mathematical problem
about SIMPLE INTEREST in a ½
crosswise finding the PRINCIPAL
AMOUNT, RATE, INTEREST AND
TIME(in months or days).
• Exchange your mini task with your
seatmate.

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