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Transparency 8. Click the mouse button or press the Space Bar to display the answers. Example 8-3d. Objective. Solve problems involving simple interest. Example 8-3d. Vocabulary. Interest. The amount of money paid or earned for the use of money. Example 8-3d. Vocabulary. Principal.

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  1. Transparency 8 Click the mouse button or press the Space Bar to display the answers.

  2. Example 8-3d Objective Solve problems involving simple interest

  3. Example 8-3d Vocabulary Interest The amount of money paid or earned for the use of money

  4. Example 8-3d Vocabulary Principal The amount of money invested or borrowed

  5. Lesson 8 Contents Example 1Find Simple Interest Example 2Find the Total Amount Example 3Find the Interest Rate

  6. Example 8-1a Find the simple interest for $2,000 invested at 5.5% for 4 years. Write the simple interest formula. Replace p with amount invested I = 2,000 I = 2,000  5.5% I = 2,000  5.5%  4 Replace r with rate which is in % Replace t with time in years Use calculator to solve 1/3

  7. Example 8-1a Find the simple interest for $2,000 invested at 5.5% for 4 years. Enter 2,000 Enter multiplication sign  I = 2,000 I = 2,000  5.5% I = 2,000  5.5%  4 Enter 5.5 Enter % 2,000 5.5 4 %  =  Enter multiplication sign  I = 440 I = $440 Enter 4 Enter = Answer: I = $440 Add dimensional analysis 1/3

  8. Example 8-1b Find the simple interest for $1,500 invested at 5% for 3 years. Answer: I = $225 1/3

  9. Example 8-2a Find the total amount of money in an account where $80 is invested at 6% for 6 months. Find the total amount of money Total Amount = Interest + principle 6 Write the interest formula I = 80 I = 80  5.5% I = 80  5.5%  12 Replace p with amount invested Replace r with rate which is % Replace t with time in years Time is given in months and must have years so put over denominator of 12 (12 months in a year) 2/3

  10. Example 8-2a Find the total amount of money in an account where $80 is invested at 6% for 6 months. Find the total amount of money Solve using a calculator 6 Remember: Must find total amount by adding the interest to the principle I = 80 I = 80  5.5% I = 80  5.5%  12 I = $2.40 Replace principle with 80 Total = Principle + Interest Replace interest with 2.40 Total = 80 Total = 80 + 2.40 Add Total = $82.40 Total = 82.40 Add dimensional analysis Answer: Total = $82.40 2/3

  11. Example 8-2d Find the total amount of money in an account where $60 is invested at 8% for 3 months. Answer: Total = $61.20 2/3

  12. Example 8-3a LOANS Gerardo borrowed $4,500 from his bank for home improvements. He will pay $1,260 interest for the next four years. Find the simple interest rate of the loan. Find the simple interest rate Write the simple interest formula. Replace I with interest paid 1,260 = 4,500  r  4 1,260 = 4,500 1,260 = 4,500  r 4,500 r  4 1,260 Replace p with amount borrowed 1,260 = 18,000  r Define the variable for the rate Replace t with time in years Combine “like” terms Commutative Property of Multiplication allows changing order when multiplying 3/3

  13. Example 8-3a LOANS Gerardo borrowed $4,500 from his bank for home improvements. He will pay $1,260 interest for the next four years. Find the simple interest rate of the loan. Find the simple interest rate Ask “what is being done to the variable?” 1,260 = 4,500 1,260 = 4,500  r 1,260 = 4,500  r  4 4,500 r  4 1,260 The variable is being multiplied by 18,000 1,260 = 18,000  r Do the inverse on both sides of the equal sign 3/3

  14. Example 8-3a LOANS Gerardo borrowed $4,500 from his bank for home improvements. He will pay $1,260 interest for the next four years. Find the simple interest rate of the loan. Find the simple interest rate Bring down 1,260 = 18,000  r Using the fraction bar, divide both sides by 18,000 1,260 = 4,500  r  4 1,260 = 4,500 1,260 = 4,500  r 4,500 r  4 1,260 1,260 = 18,000  r Combine “like” terms 1,260 = 18,000  r Use Identify Property to multiply 1  r 18,000 18,000 0.07 0.07 = 1  r 0.07 = r 3/3

  15. Example 8-3a LOANS Gerardo borrowed $4,500 from his bank for home improvements. He will pay $1,260 interest for the next four years. Find the simple interest rate of the loan. Find the simple interest rate Remember: Rate is a % so multiply by 100 and add % sign 1,260 = 4,500  r  4 1,260 = 18,000  r 1,260 = 18,000  r 18,000 18,000 0.07 = 1  r 0.07 = r Answer: 7% = rate 3/3

  16. Example 8-3d * LOANS Jocelyn borrowed $3,600 from her bank for home improvements. She will repay the loan by paying $90 a month for the next five years. Find the simple interest rate of the loan. Answer: Rate = 10% 3/3

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