21
Main Idea and New Vocabulary
NGSSS
Example 1:Find Simple Interest
Example 2: Find the Interest Rate
Example 3: Find the Total Amount
Five-Minute Check
• Solve problems involving simple and compound interest.
• interest
• simple interest
• principal
• compound interest
MA.8.A.6.4 Perform operations on real numbers (including integer exponents, radicals, percents, scientific notation, absolute value, rational numbers, and irrational numbers) using multi-step and real world problems.
Find Simple Interest
Find the simple interest for $2,000 invested in a savings account at 5.5% for 4 years.
I = prt Write the simple interest formula.
I = 2,000 ● 0.055 ● 4 Replace p with 2,000, r with 0.055, and t with 4.
I = 440
Answer: The simple interest is $440.
A. $44.10
B. $132.30
C. $1,112.30
D. $1,323.00
Find the simple interest for $980 invested in a savings account at 4.5% for 3 years.
LOANS Callie borrowed $4,500 from a bank to pay part of her college tuition. She will repay the loan by paying $120 a month for the next four years. Find the simple interest rate of the loan.
Find the Interest Rate
First find the total that Callie will pay.
$120 ● 48 = $5,760 4 years = 48 months
She will pay $5,760 – $4,500 or $1,260 in interest. So, I = 1,260.
Find the Interest Rate
I = prt Write the simple interest formula.
1,260= 4,500 ● r ● 4 Replace I with 1,260, p with 4,500, and t with 4.
1,260= 18,000r Simplify.
0.07= r Simplify.
Answer: The simple interest rate is 0.07 or 7%.
Divide each side by 18,000.1,260
A. 1.18%
B. 6%
C. 6.6%
D. 18%
LOANS Samantha borrowed $7,200 from a bank to pay for a used car. She will repay the loan by paying $236 a month for the next three years. Find the simple interest rate of the loan.
Find the Total Amount
SAVINGS How much money is in an account where $80 is invested at an interest rate of 6% compounded annually for 3 years?
Find the amount of money in the account at the end of the year 1.
I = prt Write the simple interest formula.
I = 80 ● 0.06 ● 1 Substitution
I = 4.8 Simplify.
80 + 4.80 = 84.80 Add the amount invested and the
interest.
Find the Total Amount
Find the amount of money in the account at the end of year 2.
I = prt Write the simple interest formula.
I = 84.80 ● 0.06 ● 1 Substitution
I = 5.088 Simplify.
84.80 + 5.09 = 89.89 Add the amount invested and the
interest.
Find the Total Amount
Answer: After 3 years there is $89.89 + $5.39 or $95.28.
Find the amount of money in the account at the end of year 3.
I = prt Write the simple interest formula.
I = 89.89 ● 0.06 ● 1 Substitution
I = 5.3934 Simplify.
A. $327.05
B. $345.04
C. $361.15
D. $364.02
SAVINGS How much money is in an account where $310 is invested at an interest rate of 5.5% compounded annually for 3 years?
A. $8.00
B. $12.00
C. $24.00
D. $240.00
Find the simple interest to the nearest cent.$300 at 4% for 2 years
A. $23.44
B. $37.50
C. $46.88
D. $234.38
Find the simple interest to the nearest cent.$750 at 6.25% for 6 months
A. $1,337.50
B. $1,425.00
C. $1,431.13
D. $2,675.00
Find the total amount in the account to the nearest cent if the interest is compounded annually.$1,250 at 7% for 2 years
A. $628.50
B. $642.75
C. $643.43
D. $942.75
Find the total amount in the account to the nearest cent if the interest is compounded annually.$600 at 4.75% for 18 months
A. $110.00
B. $550.00
C. $610.50
D. $1,100.00
Sam borrowed $5,000 at 11% simple interest for two years. He made no payments during those two years. How much interest is owed at the end of those two years?
A. $18.75
B. $37.50
C. $187.50
D. $225.00
Anna decided to invest $1,500 at 2.5% simple interest for six months. How much interest does her investment earn?
