Math-8 NOTES

1. NAME: DATE: ______/_______/_______ Math-8 NOTES What: simple interest Why: To apply the simple interest formula to a variety of real-life interest scenarios. Vocabulary: simple interest-- the amount of money __________________or _________________ for the use of money. principal– amount of money deposited or _______________________________________ . rate-- determines the amount you _________ the bank; or, the amount the bank owes you. annual-- “per year.” You earn interest when you deposit $ in a bank. You pay interest when you borrow $ from a bank. Formula: I = p●r•t I = P = R = T= Notice that the 6% interest rate must be converted to a decimal (.06) when you use the formula! Examples: A student takes out an emergency loan for $600 to pay for school supplies. The interest rate is 6% annually. How much interest does the student have to pay after one year? I = p = r = t = An investor deposits $2,000 into a savings account. The account pays 7% interest annually. What is the total balance after two years? I = p = r = t =

2. 3) Emilio’s father borrows $1,200 from the bank for a riding lawn mower. The interest rate is 8% per year. How much interest will he pay if he takes 3 years to repay the loan? • I = • p = • r = • t = • 4) Raini has $750 in a savings account that pays 3% simple interest. If Raini does not withdraw any money, how much will be in the account after 4 years? • I = • p = • r = • t = • Marcus invests $1,800 for 2 years and earns $144 in interest. What was the interest rate? • I = • p = • r = • t =

3. DATE: ______/_______/_______ NAME:___________________________________ Math-8 Practice “SIMPLE INTEREST”