Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P =...
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Transcript of Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P =...
![Page 1: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/1.jpg)
Computing Simple Interest
Mr. Swaner
![Page 2: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/2.jpg)
Notes
The formula for computing simple interest is:
I = Prt
P = principler = rate (decimal form)
t = time (years)
I = interest
![Page 3: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/3.jpg)
Example
What is the interest on a $500 loan at 5% interest paid back in 1 year?
I = Prt
Can we identify the parts?
Do we know the interest?
![Page 4: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/4.jpg)
Example
What is the interest on a $500 loan at 5% interest paid back in 1 year?
I = Prt
Do we know the principle?
![Page 5: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/5.jpg)
Example
What is the interest on a $500 loan at 5% interest paid back in 1 year?
I = Prt
Do we know the principle?
![Page 6: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/6.jpg)
Example
What is the interest on a $500 loan at 5% interest paid back in 1 year?
I = Prt
What about the rate?
![Page 7: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/7.jpg)
Example
What is the interest on a $500 loan at 5% interest paid back in 1 year?
I = Prt
What about the rate?
![Page 8: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/8.jpg)
Example
What is the interest on a $500 loan at 5% interest paid back in 1 year?
I = Prt
And the time?
![Page 9: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/9.jpg)
Example
What is the interest on a $500 loan at 5% interest paid back in 1 year?
I = Prt
And the time?
![Page 10: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/10.jpg)
Example
What is the interest on a $500 loan at 5% interest paid back in 1 year?
I = Prt
Now that we have all of the parts, we can write an equation
![Page 11: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/11.jpg)
Example
What is the interest on a $500 loan at 5% interest paid back in 1 year?
I = Prt
I = 500(.05)(1)
I = $25
![Page 12: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/12.jpg)
Example
Now that we know how much interest must be paid, what is the total cost of the loan?
$500 loan at 5% interest paid back in 1 year?
Interest = $25Principle = $500
$500 $25+ = $525 Total cost
![Page 13: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/13.jpg)
You Try
You take out a loan for your first car which costs $8,000. The interest rate is 6% and you must pay it back in 5 years. How much interest must be paid and how much is the cost of the loan?
![Page 14: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/14.jpg)
You Try
P = $8,000 R = 6% T = 5 years.
I = 8,000(.06)(5)
I = $2,400
$8,000 + $2,400 = $10,400
![Page 15: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/15.jpg)
Notes
What happens if the time is in months not in years?
1 month =
6 months =
20 months =
years
years
years
![Page 16: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/16.jpg)
Example
You take out a loan on your paycheck (which is a really bad idea) for $800. The interest rate is 12% and must be paid back in 3 months. What is the total cost?
I = 800(.12)( ) = .25
I = $24 $800 + $24 = $824
![Page 17: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/17.jpg)
Notes
When computing total savings, we use the same formula
I = Prt
![Page 18: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/18.jpg)
Let’s do one together
You put $200 in a savings account for 10 years at 8% interest. How much is in the account when you go to collect the money?
![Page 19: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/19.jpg)
Let’s do one together
You put $200 in a savings account for 10 years at 8% interest. How much is in the account when you go to collect the money? I = Prt
I = 200(.08)(10)
I = $160
$200 + $160 = $360
![Page 20: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/20.jpg)
Your Turn
You invest $500 in an account for 15 months at 10% interest. What is the value of the account?
I = 500(.10)( )
I = $62.50
$500 + $62.50 = $562.50
![Page 21: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/21.jpg)
Notes
We can use our formula to find other missing parts:
I = Prt
![Page 22: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/22.jpg)
Example
Interest = $50 Rate = 8% Time = 5 years
Can we find the principle?
I = Prt50 = P(.08)(5)
50 = P(.40)
= P P = $125
![Page 23: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/23.jpg)
Your Turn
Find the rate Interest = $30 Principle = $200
Time = 9 months …….remember
I = Prt30 = 200(r)( )
30 = 150r
= r r = .20 or 20%
![Page 24: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/24.jpg)
One More
Find the time Interest = $12 Principle = $200
Rate = 3%
12 = 200(.03)t
12 = 6t
= t
t = 2 years
![Page 25: Computing Simple Interest Mr. Swaner Notes The formula for computing simple interest is: I = Prt P = principle r = rate (decimal form) t = time (years)](https://reader035.fdocuments.us/reader035/viewer/2022062407/56649e725503460f94b710b5/html5/thumbnails/25.jpg)
Closure
What is our formula?
How do we find the total value?
How do we find missing parts?
I = Prt
Add the principle and the interest
Fill in the parts we know and solve for the missing value