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8-6 Simple Interest

8-6 Simple Interest. Pages 358-360. Indicator  N8 Develop and analyze algorithms for computing with percents and demonstrate fluency in use. Why do people deposit money into banks? What does a savings account and a loan from a bank have in common?. 8-6 Simple Interest.

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8-6 Simple Interest

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  1. 8-6 Simple Interest Pages 358-360 Indicator  N8 Develop and analyze algorithms for computing with percents and demonstrate fluency in use.

  2. Why do people deposit money into banks? What does a savings account and a loan from a bank have in common?

  3. 8-6 Simple Interest • Simple interest- the amount of money paid or earned for the use of money. • the amount of money a bank pays you for you loaning them your money. • or the amount of money you pay a creditor for borrowing money. • Simple Interest formula I= prt • I = simple interest • p = principal (the money you invest or put-in) • r = rate (the annual interest rate- percent written as a decimal) • t = time (the amount of time the money is invested-in years)

  4. Find the simple interest earned… Brandon found a bank offering a certificate of deposit that pays 4% simple interest. He has $1,500 to invest. How much interest will he earn in 3 years? 30 months? I = prt I = 1500(0.04)(3) I = 180 30 months? I = prt = 1500(0.04) I = 150 Write the interest formula. Plug-in the values for the variables. Solve. Write the interest formula. Plug-in the values for the variables. (2.5) Convert the time to years! 30 ÷ 12 = Solve. Brandon will earn $180.00 in interest in 3 years. In 30 months, he will earn $150.00 in interest. Write a sentence.

  5. Find the simple interest paid… Laura borrowed $2000 from her credit union to buy a computer. The interest rate is 9% per year. How much interest will she pay if it takes her 8 months to repay the loan? Including interest, how much will she pay for the computer? I = prt Write the interest formula. Plug-in the values for the variables. I = 2000(9%)(8 mos) Convert the % to decimal! Convert the time to years! I = 2000(0.09) (0.6) I = 120 Solve. Write a sentence. Laura will pay $120.00 in interest in 8 months. In total, Laura will repay $2,120.00 for her computer.

  6. Find total paid on a credit card… Alma charged a $30.00 handbag on her credit card with an interest rate of 17%. If she has no other charges on the credit card, how much money will she owe after 6 months? I = prt Write the interest formula. Plug-in the values for the variables. I = 30(17%)(6 mos) Convert the % to decimal! Convert the time to years! I = 30(0.17) (0.5) I = 2.55 Solve. Write a sentence. In 6 months, Alma will pay $32.55 for the handbag.

  7. Homework • Pg. 360 • #8-28 even only

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