SIMPLE INTEREST

Ariel takes a loan of $8,000 to buy a used truck at the rate of 9 % simple Interest. Calculate the annual interest to be paid for the loan amount.

$720

Steve invested $ 10,000 in a savings bank account that earned 2% simple interest. Find the interest earned if the amount was kept in the bank for 4 years.

$800

$60

A deposit of $500 in an account earns 6% simple interest. How much interest will it earn in 2 years?

Time

For simple interest this is the years (period) that money is on loan and earning interest

Rate

Interest that is expressed in the decimal form of percent.

INTEREST

The amount of money charged to the borrower for the use of money

Principal

The initial amount of money deposited or borrowed.

I = P•r•t

The simple interest formula

$72

You borrow $600 from your parents at 4% interest for 3 years. How much interest will you pay them?

$1000

You deposit $5000 in an account that earns 5% simple interest. How much interest will it earn in 4 years?

Interest

amount earned on the principal

rate

must be expressed as a decimal

time

must be expressed as years

$4,092

p=$34,100 r=4% t=3 years, what is I?

$157.50

p=$500 r=4.5% t=7

$2,720

p=$6,800 t=16 years r=2.5%, what is I?

$6,630

p=$8,500 r=6.5% t=12, what is I?

Final Balance

principal + interest

$1,080

r=4.5% t=2 years p=$12000, what is I?

$4,204.80

r=4.8%, p = $43800, t=2 years, what is I?

$73.80

r=6% t=4 years p=$307.50, what is I?

Principal

the amount borrowed or invested