Simple lnterest HW

READ: Simple interest is money that can be earned through the investment of money. Thesimple interest equation is shown below:

l=PrtI . lnterest (money gained)P = PrincipalAmount {how much you invest}r = r?te of interest written as a decimalt = tirne in months or years

Here is an example of how to find simple interest:

Example:You decide to invest 5SO0 for 3 yaars at a simple interest rate of 4% per year How much interest will you earn?

First, label your variables with the appropriate inforrnation:

P {principal} = $5mr {rate written as a decimal} = 4% t0.04t {time in years} - 3 years

Next substitute these values irto the Simple lnterest Equation:

t=Prt -

t=s0o{0,0a}F}

Finally, multiply!

| = 5o0{0.04}{s}= 0O

5q you willearn $60,

Directions: Find the simple interest for each situation.

1) You decide to invest $850 for t5 years at a simple interest rate of 3%.

$ sar ,5o2) For 9 years, you have invested SgS at a simple interest rale of 2%.

$t .303) You invest $10,000 for a total of 20 years at a simple interest rate of 4.5%.

fl qooo.ooyears with a simple interest rate of l%.

,3\of 2%

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4) You invest SSO for a total

READ: Many times, you will want to know exactly how much money will be in your bankaccount with the simple interest that you earned. To find this, you need to add one extra step.Here are the steps you can follow to find your grand total in a bank account that earns simpleinterest:

STEP ONE: Find the simple interest by using l= Prt.

STEP TWO: Add this simple interest to the original principal amount.

Example:Yau decide to invest $aO0 at a 0.5% interest rate. How much monay will you have in your bank account after 10 yearc?

First find the simple interest.

| = it00{0,005}{r0} = $20

Next, add this simple interest to the prindpal amount.

$soo+$20=$420

5q you will have $420 in your bank account after 10 years.

Directions: Find the total amount in the bank account in each situation.

5)-You invest SSOOO in an aecount for 8 years at a simple interest rale sl-79/s.

[; Boo,0o6) You invest $20,540 in an account at a simple interest rate of 5.5% f or 5 years.

$ af 3rt,?c7) You invest SSZS in an account with a simple interest rate of 3.75% for 16 years.

\ \qgo,oo8) You invest SZ8O in an account for 1L.5 years. The simple interest rate is 5%.

# \ aa a,50Working backward: Solve!

9) lf you earned S8OO in simple interest after investing at a rate of 4% for 10 years, how much did

vouinitiarvinvest? & W $ l,COO,OO

10) You initially invested 5200 into an account that earned S+O in simple interest after 8 years.

What was the rate of interest you were given? ) ,S %

Here is an example: