Unit 3 Chapter 5 Section 5 Simple Interest.notebook
January 12, 2016
Bellringer:
1) Bryan and two friends went to Pizza Hut for lunch. The total bill came to $35.65. Bryan wants to leave a 20% tip. What is the total that Bryan should leave?
2) Your neighbor pays $30 to have her flower garden weeded and always adds a 20% tip. You and your friend decide to weed the garden together and split the earnings evenly. How much will each of you make?
Unit 3 Chapter 5 Section 5 Simple Interest.notebook
January 12, 2016
Unit 3
Chapter 5 Section 5
Simple Interest
Objective: To find simple interest
Money may not grow on trees, but it can grow in a bank.
When you deposit money, you earn money called interest.
When you borrow money, you pay interest on your loan.
Principal: the original amount you deposit or
borrow
Simple Interest: interest earned only on the
principal
Formula:
I = prt
I = interest
p = principal
r = interest rate
t = time
Unit 3 Chapter 5 Section 5 Simple Interest.notebook
January 12, 2016
Examples:
Finding Simple Interest
1) Dan deposited $500 into a savings account at a local bank that earns 2% interest per year. How much interest does he earn in 3 years?
2) You borrow $300 for 5 years at an annual interest rate of 4%. What is the simple interest you pay in dollars?
3) The Smith's are looking to buy a new house that costs $250,000. They get a loan for that amount at 5% interest for 30 years. How much interest will they have to pay over the life of the loan? How much money total will they end up paying for the house?
Unit 3 Chapter 5 Section 5 Simple Interest.notebook
January 12, 2016
Graphing Simple Interest
4) You have $500 in an account that earns an annual rate of 5.1%. At the end of each year, you withdraw the interest you have earned. Graph the total interest you earn after 1, 2, 3 and 4 years.
Step 1: Make a Table
Time (yr)
Interest ($)
Step 2: Draw a Graph
Unit 3 Chapter 5 Section 5 Simple Interest.notebook
January 12, 2016
Comparing Loans
5) You need to borrow $1000. You can borrow it for 3 years at 8% simple interest or for 2 years at 11% simple interest. Which loan will cost more?
3 Year Loan
2 Year Loan
Unit 3 Chapter 5 Section 5 Simple Interest.notebook
Homework
Practice Worksheet 5­5
January 12, 2016