8 6 Simple Interest

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8 6 Simple Interest

  1. 1. 8-6 Simple Interest Solve problems involving simple interest
  2. 2. Turn and talk <ul><li>Why do people deposit money into the bank? </li></ul><ul><li>What do savings accounts and loans have in common? </li></ul>
  3. 3. Concept Map—Simple Interest Simple Interest What? Why do I care? How?
  4. 4. Henry has $750 in a savings account that pays 3% simple interest. How much interest will he earn in each amount of time? <ul><li>4 years </li></ul><ul><li>3 years </li></ul><ul><li>9 months </li></ul>
  5. 5. What would I plug in for the time on each? <ul><li>3 months </li></ul><ul><li>5 months </li></ul><ul><li>2 ½ years </li></ul>
  6. 6. Emilio’s father borrows $1,200 from the bank for a riding lawn mower. The interest rate is 8% per year. How much simple interest will he pay if he takes 2 years to repay the loan?
  7. 7. Emilio’s father borrows $1,200 from the bank for a riding lawn mower. The interest rate is 8% per year. How much will he have to pay back in all?
  8. 8. Cory charged a $600 TV on his credit card with an interest rate of 21%. If he has no other charges on the card, how much money will he owe after one month?
  9. 9. Find the interest earned to the nearest cent for each principal, interest rate, and time. <ul><li>$640, 3%, 2 years </li></ul><ul><li>$1,500, 4.25%, 4 years </li></ul>
  10. 10. Find the interest paid to the nearest cent for each loan balance, interest rate, and time <ul><li>$4,500, 9%, 3.5 years </li></ul><ul><li>$290, 12.5%, 6 months </li></ul>
  11. 11. In 2002, a $5 bank note from 1886 was sold to a collector for $103,500. Suppose a person had deposited the $5 in a bank in 1886 with an interest rate of 4%. After 116 years, how much simple interest would have been earned on the account?
  12. 12. Marcus would like to have $2,340 altogether. If he invests his money at 5% interest, in how many yeas will he have $2,340? A bonus buck to the first person who gets it.
  13. 13. <ul><li>Choose one partner to be the banker and one the customer. (you will trade in a minute) </li></ul><ul><li>The banker must present options for loans and savings accounts. </li></ul><ul><li>The customer must determine how much interest will be earned or owed for various amounts. </li></ul><ul><li>Then the banker and customer trade. </li></ul>
  14. 14. <ul><li>Terry invested $2,200 in the stock market for 2 years. IF the investment earned 12% simple interest, how much money did Terry earn in interest in 2 years? </li></ul>
  15. 15. <ul><li>How much interest will Hannah earn in 4 years if she deposits $630 in a savings account at 6.5% simple interest? </li></ul>
  16. 16. <ul><li>When Melissa was born, her parents put $8,000 into a college fund account that earned 9% simple interest. Find the total amount in the account after 18 years. </li></ul>
  17. 17. Journal <ul><li>List the steps you would use to find the simple interest on a $500 loan at 6% interest rate for 18 months. </li></ul>
  18. 18. Homework <ul><li>P 359: 2, 8-21 </li></ul>

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