simpleinterest.notebook
May 10, 2013
Simple Interest
• Interest paid only on the original principal, not on the interest accrued.
• Most commonly for the use of borrowed money or money earned by deposited funds.
May 9­1:57 PM
Formula
I = prt
I = Interest
p = Principal (original amount)
r = Interest Rate (%)
t = Time (per year)
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1
simpleinterest.notebook
May 10, 2013
I = prt
principal = ?
rate = 5%
time = 4 years
interest = $90
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I = prt
principal = $150
rate = 6%
time = ? years
interest = $54
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2
simpleinterest.notebook
principal = $200
rate = ?%
time = 3 years
interest = $30
May 10, 2013
I = prt
May 9­1:57 PM
I = prt
principal = $125
rate = 4%
time = 2 years
interest = ?
May 9­1:57 PM
3
simpleinterest.notebook
May 10, 2013
How much interest would you pay on a loan for $8000
at 4.5% simple interest for 5 years?
I = prt
I =
p =
r = t =
May 9­1:57 PM
How many years would it take to earn $540 on a
deposit of $4500 at 3% simple interest?
I =
p =
r = t =
I = prt
May 9­1:57 PM
4
simpleinterest.notebook
May 10, 2013
Find the interest and the total amount to the nearest cent.
$617 at 6% per year for 3 months
I =
p =
r = t =
I = prt
May 9­1:57 PM
How much interest would you earn on $4500 at 2%
simple interest for 4 months ?
I =
p =
r = t =
I = prt
May 9­1:57 PM
5
simpleinterest.notebook
May 10, 2013
At what simple interest would you earn $300 on a
deposit of $5000 after 3 years?
I =
p =
r = t =
I = prt
May 9­1:57 PM
6