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Splash Screen. You have worked with formulas before. Solve simple interest problems and apply the simple interest equation to real-world problems. Solve compound interest problems. Then/Now. The amount of money paid or earned for the use of money. interest.

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  1. Splash Screen

  2. You have worked with formulas before. • Solve simple interest problems and apply the simple interest equation to real-world problems. • Solve compound interest problems. Then/Now

  3. The amount of money paid or earned for the use of money • interest The amount of money paid or earned for the use of money on initial investment only (I = prt) • simple interest • principal The amount of money in an account at the time of calculating interest (generally thought of beginning cash)_ Vocabulary

  4. Find Simple Interest A. Find the simple interest for $2000 invested at 2.5% for 3 years. I = prt Write the simple interest formula. I = 2000 ● 0.025 ● 3 Replace p with 2000, r with 0.025, and t with 3. I = 150Simplify. Answer: The simple interest is $150. Example 1A

  5. Find Simple Interest B. Find the simple interest for $4500 invested at 4.25% for 2 years. I = prt Write the simple interest formula. I = 4500 ● 0.0425 ● 2 Replace p with 4500, r with 0.0425, and t with 2. I = 382.50Simplify. Answer: The simple interest is $382.50. Example 1B

  6. A B C D A. What is the simple interest for $3000 invested at 3.5% for 2 years? A. $105 B. $150 C. $210 D. $350 Example 1A

  7. A B C D B. What is the simple interest for $2500 invested at 2.75% for 4 years? A. $137.50 B. $275 C. $302.75 D. $412.50 Example 1B

  8. Find the Interest Rate SWIMMING POOLMr. Webster borrowed $1280 to buy a new swimming pool. He will pay $57.60 each month for the next 24 months. Find the simple interest rate for his loan. Understand You need to find the simple interest rate. Plan Use the formula I = prt. Solve First, find the amount of interest he will pay over 24 months. 24 ● $57.60 = $1382.40 Multiply to find the total amount. Example 2

  9. Find the Interest Rate $1382.40 – $1280 = $102.40 Subtract to find the interest. The principal is $1280. So, p = 1280. The loan will be for 24 months or 2 years, so t = 2. I = prt Write the simple interest formula. 102.40= 1280 ● r ● 2 Replace I with 102.40, p with 1280, and t with 2. 102.40 = 2560r Simplify. Example 2

  10. CheckUse the formula I = prt. $1280 ● 0.04 ● 2 = $102.40  Find the Interest Rate Divide each side by 2560. 0.04= r Answer: The simple interest rate is 0.04 or 4%. Example 2

  11. A B C D Mrs. Wymer borrowed $5100 to remodel her kitchen. She will pay $238 a month each month for the next 24 months. What is the simple interest rate for the loan? A. 4.5% B. 5% C. 5.5% D. 6% Example 2

  12. End of the Lesson

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