Applications of Simple Interest

1. Applications of Simple Interest Example 1: Eight years ago Ann put some money in a savings account at 5% interest. She checked her account balance and found it to be $7840. What was the original amount invested? 1) Variable declaration: Let x represent the original amount invested. This is called the principal.

2. Eight years ago Ann put some money in a savings account at 5% interest. She checked her account balance and found it to be $7840. What was the original amount invested? 2) Write the equation: Since the original amount (principal) is x, …

3. Eight years ago Ann put some money in a savings account at 5% interest. She checked her account balance and found it to be $7840. What was the original amount invested? 3) Solve the equation:

4. Eight years ago Ann put some money in a savings account at 5% interest. She checked her account balance and found it to be $7840. What was the original amount invested? x = original amount 4) Write an answer in words, explaining the meaning in light of the application The original amount that Ann invested was $5600.

5. Applications of Simple Interest Example 2: Five years ago Megan borrowed $7000 for a kitchen project. Her current payback amount is $8225. What was the interest rate? 1) Variable declaration: Let r represent the interest rate.

6. Five years ago Megan borrowed $7000 for a kitchen project. Her current payback amount is $8225. What was the interest rate? 2) Write the equation: Since the rate is r, …

7. Five years ago Megan borrowed $7000 for a kitchen project. Her current payback amount is $8225. What was the interest rate? 3) Solve the equation:

8. Five years ago Megan borrowed $7000 for a kitchen project. Her current payback amount is $8225. What was the interest rate? r = interest rate 4) Write an answer in words, explaining the meaning in light of the application Megan’s interest rate was 3.5%.

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