December 10, 2015
5-5: Simple Interest
Simple Interest: interest earned only on principal
Principal: original amount you deposit or borrow
Rate: interest rate (decimal form)
I = prt
Time: number of years deposited or borrowed
You borrow $300 for 5 years at an annual rate of 4%. What is the simple interest you pay in
dollars?
Find the simple interest you pay on a $2200 loan at a 5% annual interest rate for 4 years.
December 10, 2015
Graphing Simple Interest
You have $500 in an account that earns an annual interest rate of 5.1%. At the end of each
year, you withdraw the interest you have earned. Graph the total interest you earn after 1, 2,
3, and 4 years.
Time (yr)
1
2
3
4
Interest ($)
Comparing Loans
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
December 10, 2015
5-6 Finding Percent of Change
A percent of change is the percent a quantity increases or decreases from its original
amount.
Use a proportion to find a percent of change.
amount of change = percent of change
original amount
100
South Carolina has 6 seats in the US House of Representatives in the 2000s. After the
2010 census, South Carolina had 7 seats. Find the percent of increase in the number of
representatives.
Markup: The difference between the selling price and the store's cost of an item
amount of markup = percent of markup
original cost
100
An electronics store orders sets of walkie-talkies for $14.85 each. The store sells each
set for $19.90. What is the percent of markup?
December 10, 2015
discount: the difference between the original price and the sale price of an item
amount of discount = percent of discount
original cost
100
During a clearance sale, a keyboard that normally sells for $49.99 is discounted to
$34.99. What is the percent of discount?