March 1 Simple Interest

383 views
220 views

Published on

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
383
On SlideShare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
10
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

March 1 Simple Interest

  1. 1. Interest (simple) Money paid to borrow money A fee for borrowing Money earned for lending
  2. 2. Interest I=prt I = Interest principal = starting money rate = percent of interest per year time = time in years
  3. 3. I=prt Example: Nat lends Issah $100. Nat charges Issah 10% interest. Issah forgets to pay Nat back for a year! How much does Issah owe Nat? Solution I = 100 * .1 * 1 I = $10 Issah owes Nat $110
  4. 4. I=prt Example 2: Kim borrows money from a payday loan place. They charge 25% interest. Kim borrows $300 for 60 days. How much does she need to pay back? Solution: I = 300 * .25 * 60 ÷ 365 I = $12.33 Kim needs to pay $312.33 back.
  5. 5. I=prt Example 3 Allen deposits $3000 into a bank account that earns 4.5% interest. After how many months will he have earned $500 in interest? Solution 500 = 3000 * .045 * t t = 500 ÷ (3000 * .045) t = 3.7 years * 12 months t = 44.44 months

×