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454 Chapter 9 Percents
Family Loan Tim’s parents lend Tim $100 so he can buy a radio-controlled airplane. They charge Tim 5% simple annual interest. What will be the total amount that Tim will owe his parents in 1 year?
The amount earned or paid for the use of money is called . The amount of money deposited or borrowed is the . When interest is earned or paid only on the principal, it is . The
is the percent of the principal earned or paid peryear. The sum of the interest and the principal is called the . balanceannual interest rate
simple interestprincipal
interest
In the Real World
Word Watchinterest, p. 454principal, p. 454simple interest, p. 454annual interest rate, p. 454balance, p. 454
B E F O R E Now W H Y ?
Simple Interest
You calculated discounts,markups, sales tax, and tips.
You’ll calculate simple interest.
So you can find the amount of asecurity deposit, as in Ex. 19.
Simple InterestWords Simple interest I is the product of the principal P, theannual interest rate r written as a decimal, and the time t inyears.
Algebra I ! Prt
Numbers A $500 deposit earns 6% simple annual interest for4 years. I ! ($500)(0.06)(4) ! $120
E X A M P L E 1 Finding a Balance
To find the total amount that Tim will owe, as described above, first findthe interest using the simple interest formula.
I ! Prt Write simple interest formula.
! (100)(0.05)(1) Substitute 100 for P, 0.05 for r, and 1 for t.
! 5 Multiply.
To find the balance, add the interest to the principal.
ANSWER Tim will owe a balance of $100 " $5, or $105.
454 Chapter 9 Percents
Family Loan Tim’s parents lend Tim $100 so he can buy a radio-controlled airplane. They charge Tim 5% simple annual interest. What will be the total amount that Tim will owe his parents in 1 year?
The amount earned or paid for the use of money is called . The amount of money deposited or borrowed is the . When interest is earned or paid only on the principal, it is . The
is the percent of the principal earned or paid peryear. The sum of the interest and the principal is called the . balanceannual interest rate
simple interestprincipal
interest
In the Real World
Word Watchinterest, p. 454principal, p. 454simple interest, p. 454annual interest rate, p. 454balance, p. 454
B E F O R E Now W H Y ?
Simple Interest
You calculated discounts,markups, sales tax, and tips.
You’ll calculate simple interest.
So you can find the amount of asecurity deposit, as in Ex. 19.
Simple InterestWords Simple interest I is the product of the principal P, theannual interest rate r written as a decimal, and the time t inyears.
Algebra I ! Prt
Numbers A $500 deposit earns 6% simple annual interest for4 years. I ! ($500)(0.06)(4) ! $120
E X A M P L E 1 Finding a Balance
To find the total amount that Tim will owe, as described above, first findthe interest using the simple interest formula.
I ! Prt Write simple interest formula.
! (100)(0.05)(1) Substitute 100 for P, 0.05 for r, and 1 for t.
! 5 Multiply.
To find the balance, add the interest to the principal.
ANSWER Tim will owe a balance of $100 " $5, or $105.
454 Chapter 9 Percents
Family Loan Tim’s parents lend Tim $100 so he can buy a radio-controlled airplane. They charge Tim 5% simple annual interest. What will be the total amount that Tim will owe his parents in 1 year?
The amount earned or paid for the use of money is called . The amount of money deposited or borrowed is the . When interest is earned or paid only on the principal, it is . The
is the percent of the principal earned or paid peryear. The sum of the interest and the principal is called the . balanceannual interest rate
simple interestprincipal
interest
In the Real World
Word Watchinterest, p. 454principal, p. 454simple interest, p. 454annual interest rate, p. 454balance, p. 454
B E F O R E Now W H Y ?
Simple Interest
You calculated discounts,markups, sales tax, and tips.
You’ll calculate simple interest.
So you can find the amount of asecurity deposit, as in Ex. 19.
Simple InterestWords Simple interest I is the product of the principal P, theannual interest rate r written as a decimal, and the time t inyears.
Algebra I ! Prt
Numbers A $500 deposit earns 6% simple annual interest for4 years. I ! ($500)(0.06)(4) ! $120
E X A M P L E 1 Finding a Balance
To find the total amount that Tim will owe, as described above, first findthe interest using the simple interest formula.
I ! Prt Write simple interest formula.
! (100)(0.05)(1) Substitute 100 for P, 0.05 for r, and 1 for t.
! 5 Multiply.
To find the balance, add the interest to the principal.
ANSWER Tim will owe a balance of $100 " $5, or $105.
454 Chapter 9 Percents
Family Loan Tim’s parents lend Tim $100 so he can buy a radio-controlled airplane. They charge Tim 5% simple annual interest. What will be the total amount that Tim will owe his parents in 1 year?
The amount earned or paid for the use of money is called . The amount of money deposited or borrowed is the . When interest is earned or paid only on the principal, it is . The
is the percent of the principal earned or paid peryear. The sum of the interest and the principal is called the . balanceannual interest rate
simple interestprincipal
interest
In the Real World
Word Watchinterest, p. 454principal, p. 454simple interest, p. 454annual interest rate, p. 454balance, p. 454
B E F O R E Now W H Y ?
Simple Interest
You calculated discounts,markups, sales tax, and tips.
You’ll calculate simple interest.
So you can find the amount of asecurity deposit, as in Ex. 19.
Simple InterestWords Simple interest I is the product of the principal P, theannual interest rate r written as a decimal, and the time t inyears.
Algebra I ! Prt
Numbers A $500 deposit earns 6% simple annual interest for4 years. I ! ($500)(0.06)(4) ! $120
E X A M P L E 1 Finding a Balance
To find the total amount that Tim will owe, as described above, first findthe interest using the simple interest formula.
I ! Prt Write simple interest formula.
! (100)(0.05)(1) Substitute 100 for P, 0.05 for r, and 1 for t.
! 5 Multiply.
To find the balance, add the interest to the principal.
ANSWER Tim will owe a balance of $100 " $5, or $105.
454 Chapter 9 Percents
Family Loan Tim’s parents lend Tim $100 so he can buy a radio-controlled airplane. They charge Tim 5% simple annual interest. What will be the total amount that Tim will owe his parents in 1 year?
The amount earned or paid for the use of money is called . The amount of money deposited or borrowed is the . When interest is earned or paid only on the principal, it is . The
is the percent of the principal earned or paid peryear. The sum of the interest and the principal is called the . balanceannual interest rate
simple interestprincipal
interest
In the Real World
Word Watchinterest, p. 454principal, p. 454simple interest, p. 454annual interest rate, p. 454balance, p. 454
B E F O R E Now W H Y ?
Simple Interest
You calculated discounts,markups, sales tax, and tips.
You’ll calculate simple interest.
So you can find the amount of asecurity deposit, as in Ex. 19.
Simple InterestWords Simple interest I is the product of the principal P, theannual interest rate r written as a decimal, and the time t inyears.
Algebra I ! Prt
Numbers A $500 deposit earns 6% simple annual interest for4 years. I ! ($500)(0.06)(4) ! $120
E X A M P L E 1 Finding a Balance
To find the total amount that Tim will owe, as described above, first findthe interest using the simple interest formula.
I ! Prt Write simple interest formula.
! (100)(0.05)(1) Substitute 100 for P, 0.05 for r, and 1 for t.
! 5 Multiply.
To find the balance, add the interest to the principal.
ANSWER Tim will owe a balance of $100 " $5, or $105.
454 Chapter 9 Percents
Family Loan Tim’s parents lend Tim $100 so he can buy a radio-controlled airplane. They charge Tim 5% simple annual interest. What will be the total amount that Tim will owe his parents in 1 year?
The amount earned or paid for the use of money is called . The amount of money deposited or borrowed is the . When interest is earned or paid only on the principal, it is . The
is the percent of the principal earned or paid peryear. The sum of the interest and the principal is called the . balanceannual interest rate
simple interestprincipal
interest
In the Real World
Word Watchinterest, p. 454principal, p. 454simple interest, p. 454annual interest rate, p. 454balance, p. 454
B E F O R E Now W H Y ?
Simple Interest
You calculated discounts,markups, sales tax, and tips.
You’ll calculate simple interest.
So you can find the amount of asecurity deposit, as in Ex. 19.
Simple InterestWords Simple interest I is the product of the principal P, theannual interest rate r written as a decimal, and the time t inyears.
Algebra I ! Prt
Numbers A $500 deposit earns 6% simple annual interest for4 years. I ! ($500)(0.06)(4) ! $120
E X A M P L E 1 Finding a Balance
To find the total amount that Tim will owe, as described above, first findthe interest using the simple interest formula.
I ! Prt Write simple interest formula.
! (100)(0.05)(1) Substitute 100 for P, 0.05 for r, and 1 for t.
! 5 Multiply.
To find the balance, add the interest to the principal.
ANSWER Tim will owe a balance of $100 " $5, or $105.
454 Chapter 9 Percents
Family Loan Tim’s parents lend Tim $100 so he can buy a radio-controlled airplane. They charge Tim 5% simple annual interest. What will be the total amount that Tim will owe his parents in 1 year?
The amount earned or paid for the use of money is called . The amount of money deposited or borrowed is the . When interest is earned or paid only on the principal, it is . The
is the percent of the principal earned or paid peryear. The sum of the interest and the principal is called the . balanceannual interest rate
simple interestprincipal
interest
In the Real World
Word Watchinterest, p. 454principal, p. 454simple interest, p. 454annual interest rate, p. 454balance, p. 454
B E F O R E Now W H Y ?
Simple Interest
You calculated discounts,markups, sales tax, and tips.
You’ll calculate simple interest.
So you can find the amount of asecurity deposit, as in Ex. 19.
Simple InterestWords Simple interest I is the product of the principal P, theannual interest rate r written as a decimal, and the time t inyears.
Algebra I ! Prt
Numbers A $500 deposit earns 6% simple annual interest for4 years. I ! ($500)(0.06)(4) ! $120
E X A M P L E 1 Finding a Balance
To find the total amount that Tim will owe, as described above, first findthe interest using the simple interest formula.
I ! Prt Write simple interest formula.
! (100)(0.05)(1) Substitute 100 for P, 0.05 for r, and 1 for t.
! 5 Multiply.
To find the balance, add the interest to the principal.
ANSWER Tim will owe a balance of $100 " $5, or $105.
454 Chapter 9 Percents
Family Loan Tim’s parents lend Tim $100 so he can buy a radio-controlled airplane. They charge Tim 5% simple annual interest. What will be the total amount that Tim will owe his parents in 1 year?
The amount earned or paid for the use of money is called . The amount of money deposited or borrowed is the . When interest is earned or paid only on the principal, it is . The
is the percent of the principal earned or paid peryear. The sum of the interest and the principal is called the . balanceannual interest rate
simple interestprincipal
interest
In the Real World
Word Watchinterest, p. 454principal, p. 454simple interest, p. 454annual interest rate, p. 454balance, p. 454
B E F O R E Now W H Y ?
Simple Interest
You calculated discounts,markups, sales tax, and tips.
You’ll calculate simple interest.
So you can find the amount of asecurity deposit, as in Ex. 19.
Simple InterestWords Simple interest I is the product of the principal P, theannual interest rate r written as a decimal, and the time t inyears.
Algebra I ! Prt
Numbers A $500 deposit earns 6% simple annual interest for4 years. I ! ($500)(0.06)(4) ! $120
E X A M P L E 1 Finding a Balance
To find the total amount that Tim will owe, as described above, first findthe interest using the simple interest formula.
I ! Prt Write simple interest formula.
! (100)(0.05)(1) Substitute 100 for P, 0.05 for r, and 1 for t.
! 5 Multiply.
To find the balance, add the interest to the principal.
ANSWER Tim will owe a balance of $100 " $5, or $105.
454 Chapter 9 Percents
Family Loan Tim’s parents lend Tim $100 so he can buy a radio-controlled airplane. They charge Tim 5% simple annual interest. What will be the total amount that Tim will owe his parents in 1 year?
The amount earned or paid for the use of money is called . The amount of money deposited or borrowed is the . When interest is earned or paid only on the principal, it is . The
is the percent of the principal earned or paid peryear. The sum of the interest and the principal is called the . balanceannual interest rate
simple interestprincipal
interest
In the Real World
Word Watchinterest, p. 454principal, p. 454simple interest, p. 454annual interest rate, p. 454balance, p. 454
B E F O R E Now W H Y ?
Simple Interest
You calculated discounts,markups, sales tax, and tips.
You’ll calculate simple interest.
So you can find the amount of asecurity deposit, as in Ex. 19.
Simple InterestWords Simple interest I is the product of the principal P, theannual interest rate r written as a decimal, and the time t inyears.
Algebra I ! Prt
Numbers A $500 deposit earns 6% simple annual interest for4 years. I ! ($500)(0.06)(4) ! $120
E X A M P L E 1 Finding a Balance
To find the total amount that Tim will owe, as described above, first findthe interest using the simple interest formula.
I ! Prt Write simple interest formula.
! (100)(0.05)(1) Substitute 100 for P, 0.05 for r, and 1 for t.
! 5 Multiply.
To find the balance, add the interest to the principal.
ANSWER Tim will owe a balance of $100 " $5, or $105.
454 Chapter 9 Percents
Family Loan Tim’s parents lend Tim $100 so he can buy a radio-controlled airplane. They charge Tim 5% simple annual interest. What will be the total amount that Tim will owe his parents in 1 year?
The amount earned or paid for the use of money is called . The amount of money deposited or borrowed is the . When interest is earned or paid only on the principal, it is . The
is the percent of the principal earned or paid peryear. The sum of the interest and the principal is called the . balanceannual interest rate
simple interestprincipal
interest
In the Real World
Word Watchinterest, p. 454principal, p. 454simple interest, p. 454annual interest rate, p. 454balance, p. 454
B E F O R E Now W H Y ?
Simple Interest
You calculated discounts,markups, sales tax, and tips.
You’ll calculate simple interest.
So you can find the amount of asecurity deposit, as in Ex. 19.
Simple InterestWords Simple interest I is the product of the principal P, theannual interest rate r written as a decimal, and the time t inyears.
Algebra I ! Prt
Numbers A $500 deposit earns 6% simple annual interest for4 years. I ! ($500)(0.06)(4) ! $120
E X A M P L E 1 Finding a Balance
To find the total amount that Tim will owe, as described above, first findthe interest using the simple interest formula.
I ! Prt Write simple interest formula.
! (100)(0.05)(1) Substitute 100 for P, 0.05 for r, and 1 for t.
! 5 Multiply.
To find the balance, add the interest to the principal.
ANSWER Tim will owe a balance of $100 " $5, or $105.
454 Chapter 9 Percents
Family Loan Tim’s parents lend Tim $100 so he can buy a radio-controlled airplane. They charge Tim 5% simple annual interest. What will be the total amount that Tim will owe his parents in 1 year?
The amount earned or paid for the use of money is called . The amount of money deposited or borrowed is the . When interest is earned or paid only on the principal, it is . The
is the percent of the principal earned or paid peryear. The sum of the interest and the principal is called the . balanceannual interest rate
simple interestprincipal
interest
In the Real World
Word Watchinterest, p. 454principal, p. 454simple interest, p. 454annual interest rate, p. 454balance, p. 454
B E F O R E Now W H Y ?
Simple Interest
You calculated discounts,markups, sales tax, and tips.
You’ll calculate simple interest.
So you can find the amount of asecurity deposit, as in Ex. 19.
Simple InterestWords Simple interest I is the product of the principal P, theannual interest rate r written as a decimal, and the time t inyears.
Algebra I ! Prt
Numbers A $500 deposit earns 6% simple annual interest for4 years. I ! ($500)(0.06)(4) ! $120
E X A M P L E 1 Finding a Balance
To find the total amount that Tim will owe, as described above, first findthe interest using the simple interest formula.
I ! Prt Write simple interest formula.
! (100)(0.05)(1) Substitute 100 for P, 0.05 for r, and 1 for t.
! 5 Multiply.
To find the balance, add the interest to the principal.
ANSWER Tim will owe a balance of $100 " $5, or $105.
454 Chapter 9 Percents
Family Loan Tim’s parents lend Tim $100 so he can buy a radio-controlled airplane. They charge Tim 5% simple annual interest. What will be the total amount that Tim will owe his parents in 1 year?
The amount earned or paid for the use of money is called . The amount of money deposited or borrowed is the . When interest is earned or paid only on the principal, it is . The
is the percent of the principal earned or paid peryear. The sum of the interest and the principal is called the . balanceannual interest rate
simple interestprincipal
interest
In the Real World
Word Watchinterest, p. 454principal, p. 454simple interest, p. 454annual interest rate, p. 454balance, p. 454
B E F O R E Now W H Y ?
Simple Interest
You calculated discounts,markups, sales tax, and tips.
You’ll calculate simple interest.
So you can find the amount of asecurity deposit, as in Ex. 19.
Simple InterestWords Simple interest I is the product of the principal P, theannual interest rate r written as a decimal, and the time t inyears.
Algebra I ! Prt
Numbers A $500 deposit earns 6% simple annual interest for4 years. I ! ($500)(0.06)(4) ! $120
E X A M P L E 1 Finding a Balance
To find the total amount that Tim will owe, as described above, first findthe interest using the simple interest formula.
I ! Prt Write simple interest formula.
! (100)(0.05)(1) Substitute 100 for P, 0.05 for r, and 1 for t.
! 5 Multiply.
To find the balance, add the interest to the principal.
ANSWER Tim will owe a balance of $100 " $5, or $105.
454 Chapter 9 Percents
Family Loan Tim’s parents lend Tim $100 so he can buy a radio-controlled airplane. They charge Tim 5% simple annual interest. What will be the total amount that Tim will owe his parents in 1 year?
The amount earned or paid for the use of money is called . The amount of money deposited or borrowed is the . When interest is earned or paid only on the principal, it is . The
is the percent of the principal earned or paid peryear. The sum of the interest and the principal is called the . balanceannual interest rate
simple interestprincipal
interest
In the Real World
Word Watchinterest, p. 454principal, p. 454simple interest, p. 454annual interest rate, p. 454balance, p. 454
B E F O R E Now W H Y ?
Simple Interest
You calculated discounts,markups, sales tax, and tips.
You’ll calculate simple interest.
So you can find the amount of asecurity deposit, as in Ex. 19.
Simple InterestWords Simple interest I is the product of the principal P, theannual interest rate r written as a decimal, and the time t inyears.
Algebra I ! Prt
Numbers A $500 deposit earns 6% simple annual interest for4 years. I ! ($500)(0.06)(4) ! $120
E X A M P L E 1 Finding a Balance
To find the total amount that Tim will owe, as described above, first findthe interest using the simple interest formula.
I ! Prt Write simple interest formula.
! (100)(0.05)(1) Substitute 100 for P, 0.05 for r, and 1 for t.
! 5 Multiply.
To find the balance, add the interest to the principal.
ANSWER Tim will owe a balance of $100 " $5, or $105.
454 Chapter 9 Percents
Family Loan Tim’s parents lend Tim $100 so he can buy a radio-controlled airplane. They charge Tim 5% simple annual interest. What will be the total amount that Tim will owe his parents in 1 year?
The amount earned or paid for the use of money is called . The amount of money deposited or borrowed is the . When interest is earned or paid only on the principal, it is . The
is the percent of the principal earned or paid peryear. The sum of the interest and the principal is called the . balanceannual interest rate
simple interestprincipal
interest
In the Real World
Word Watchinterest, p. 454principal, p. 454simple interest, p. 454annual interest rate, p. 454balance, p. 454
B E F O R E Now W H Y ?
Simple Interest
You calculated discounts,markups, sales tax, and tips.
You’ll calculate simple interest.
So you can find the amount of asecurity deposit, as in Ex. 19.
Simple InterestWords Simple interest I is the product of the principal P, theannual interest rate r written as a decimal, and the time t inyears.
Algebra I ! Prt
Numbers A $500 deposit earns 6% simple annual interest for4 years. I ! ($500)(0.06)(4) ! $120
E X A M P L E 1 Finding a Balance
To find the total amount that Tim will owe, as described above, first findthe interest using the simple interest formula.
I ! Prt Write simple interest formula.
! (100)(0.05)(1) Substitute 100 for P, 0.05 for r, and 1 for t.
! 5 Multiply.
To find the balance, add the interest to the principal.
ANSWER Tim will owe a balance of $100 " $5, or $105.
454 Chapter 9 Percents
Family Loan Tim’s parents lend Tim $100 so he can buy a radio-controlled airplane. They charge Tim 5% simple annual interest. What will be the total amount that Tim will owe his parents in 1 year?
The amount earned or paid for the use of money is called . The amount of money deposited or borrowed is the . When interest is earned or paid only on the principal, it is . The
is the percent of the principal earned or paid peryear. The sum of the interest and the principal is called the . balanceannual interest rate
simple interestprincipal
interest
In the Real World
Word Watchinterest, p. 454principal, p. 454simple interest, p. 454annual interest rate, p. 454balance, p. 454
B E F O R E Now W H Y ?
Simple Interest
You calculated discounts,markups, sales tax, and tips.
You’ll calculate simple interest.
So you can find the amount of asecurity deposit, as in Ex. 19.
Simple InterestWords Simple interest I is the product of the principal P, theannual interest rate r written as a decimal, and the time t inyears.
Algebra I ! Prt
Numbers A $500 deposit earns 6% simple annual interest for4 years. I ! ($500)(0.06)(4) ! $120
E X A M P L E 1 Finding a Balance
To find the total amount that Tim will owe, as described above, first findthe interest using the simple interest formula.
I ! Prt Write simple interest formula.
! (100)(0.05)(1) Substitute 100 for P, 0.05 for r, and 1 for t.
! 5 Multiply.
To find the balance, add the interest to the principal.
ANSWER Tim will owe a balance of $100 " $5, or $105.
454 Chapter 9 Percents
Family Loan Tim’s parents lend Tim $100 so he can buy a radio-controlled airplane. They charge Tim 5% simple annual interest. What will be the total amount that Tim will owe his parents in 1 year?
The amount earned or paid for the use of money is called . The amount of money deposited or borrowed is the . When interest is earned or paid only on the principal, it is . The
is the percent of the principal earned or paid peryear. The sum of the interest and the principal is called the . balanceannual interest rate
simple interestprincipal
interest
In the Real World
Word Watchinterest, p. 454principal, p. 454simple interest, p. 454annual interest rate, p. 454balance, p. 454
B E F O R E Now W H Y ?
Simple Interest
You calculated discounts,markups, sales tax, and tips.
You’ll calculate simple interest.
So you can find the amount of asecurity deposit, as in Ex. 19.
Simple InterestWords Simple interest I is the product of the principal P, theannual interest rate r written as a decimal, and the time t inyears.
Algebra I ! Prt
Numbers A $500 deposit earns 6% simple annual interest for4 years. I ! ($500)(0.06)(4) ! $120
E X A M P L E 1 Finding a Balance
To find the total amount that Tim will owe, as described above, first findthe interest using the simple interest formula.
I ! Prt Write simple interest formula.
! (100)(0.05)(1) Substitute 100 for P, 0.05 for r, and 1 for t.
! 5 Multiply.
To find the balance, add the interest to the principal.
ANSWER Tim will owe a balance of $100 " $5, or $105.
454 Chapter 9 Percents
Family Loan Tim’s parents lend Tim $100 so he can buy a radio-controlled airplane. They charge Tim 5% simple annual interest. What will be the total amount that Tim will owe his parents in 1 year?
The amount earned or paid for the use of money is called . The amount of money deposited or borrowed is the . When interest is earned or paid only on the principal, it is . The
is the percent of the principal earned or paid peryear. The sum of the interest and the principal is called the . balanceannual interest rate
simple interestprincipal
interest
In the Real World
Word Watchinterest, p. 454principal, p. 454simple interest, p. 454annual interest rate, p. 454balance, p. 454
B E F O R E Now W H Y ?
Simple Interest
You calculated discounts,markups, sales tax, and tips.
You’ll calculate simple interest.
So you can find the amount of asecurity deposit, as in Ex. 19.
Simple InterestWords Simple interest I is the product of the principal P, theannual interest rate r written as a decimal, and the time t inyears.
Algebra I ! Prt
Numbers A $500 deposit earns 6% simple annual interest for4 years. I ! ($500)(0.06)(4) ! $120
E X A M P L E 1 Finding a Balance
To find the total amount that Tim will owe, as described above, first findthe interest using the simple interest formula.
I ! Prt Write simple interest formula.
! (100)(0.05)(1) Substitute 100 for P, 0.05 for r, and 1 for t.
! 5 Multiply.
To find the balance, add the interest to the principal.
ANSWER Tim will owe a balance of $100 " $5, or $105.
454 Chapter 9 Percents
Family Loan Tim’s parents lend Tim $100 so he can buy a radio-controlled airplane. They charge Tim 5% simple annual interest. What will be the total amount that Tim will owe his parents in 1 year?
The amount earned or paid for the use of money is called . The amount of money deposited or borrowed is the . When interest is earned or paid only on the principal, it is . The
is the percent of the principal earned or paid peryear. The sum of the interest and the principal is called the . balanceannual interest rate
simple interestprincipal
interest
In the Real World
Word Watchinterest, p. 454principal, p. 454simple interest, p. 454annual interest rate, p. 454balance, p. 454
B E F O R E Now W H Y ?
Simple Interest
You calculated discounts,markups, sales tax, and tips.
You’ll calculate simple interest.
So you can find the amount of asecurity deposit, as in Ex. 19.
Simple InterestWords Simple interest I is the product of the principal P, theannual interest rate r written as a decimal, and the time t inyears.
Algebra I ! Prt
Numbers A $500 deposit earns 6% simple annual interest for4 years. I ! ($500)(0.06)(4) ! $120
E X A M P L E 1 Finding a Balance
To find the total amount that Tim will owe, as described above, first findthe interest using the simple interest formula.
I ! Prt Write simple interest formula.
! (100)(0.05)(1) Substitute 100 for P, 0.05 for r, and 1 for t.
! 5 Multiply.
To find the balance, add the interest to the principal.
ANSWER Tim will owe a balance of $100 " $5, or $105.
Lesson 9.8 Simple Interest 455
E X A M P L E 2 Finding an Interest Rate
You deposit $600 into a 6 month certificate of deposit. After 6 months the balance is $618. Find the simple annual interest rate.
To find the interest, subtract the principal from the balance.
$618 ! $600 " $18
Use the simple interest formula and solve for r.
I " Prt Write simple interest formula.
18 " (600)(r)!#162#" Substitute 18 for I, 600 for P, and #1
62# for t.
18 " 300r Multiply.
#31080# " #
330000r
# Divide each side by 300.
0.06 " r Simplify.
6% " r Write decimal as a percent.
ANSWER The simple annual interest rate is 6%.
2
1
E X A M P L E 3 Finding an Amount of Time
You put $750 into a certificate of deposit. Your simple annualinterest rate is 4%. You receive a check for the interest at the endof each year. How long will it take to earn $150 in interest?
I " Prt Write simple interest formula.
150 " (750)(0.04)t Substitute 150 for I, 750 for P, and 0.04 for r.
150 " 30t Multiply.
#13500
# " #3300t
# Divide each side by 30.
5 " t Simplify.
ANSWER It will take 5 years to earn $150 in interest.
Solve the following problems.
1. If you deposit $500 into an account that earns 6% simple annualinterest, what will the account’s balance be after 10 months?
2. You deposit $1000 into a 3 month certificate of deposit. After 3 months the balance is $1005. Find the simple annual interest rate.
Your turn now
When using thesimple interest formula,make sure you write thenumber of months as afraction of a year. Forexample, 7 months should
be written as #172#.
Watch Out!
Lesson 9.8 Simple Interest 455
E X A M P L E 2 Finding an Interest Rate
You deposit $600 into a 6 month certificate of deposit. After 6 months the balance is $618. Find the simple annual interest rate.
To find the interest, subtract the principal from the balance.
$618 ! $600 " $18
Use the simple interest formula and solve for r.
I " Prt Write simple interest formula.
18 " (600)(r)!#162#" Substitute 18 for I, 600 for P, and #1
62# for t.
18 " 300r Multiply.
#31080# " #
330000r
# Divide each side by 300.
0.06 " r Simplify.
6% " r Write decimal as a percent.
ANSWER The simple annual interest rate is 6%.
2
1
E X A M P L E 3 Finding an Amount of Time
You put $750 into a certificate of deposit. Your simple annualinterest rate is 4%. You receive a check for the interest at the endof each year. How long will it take to earn $150 in interest?
I " Prt Write simple interest formula.
150 " (750)(0.04)t Substitute 150 for I, 750 for P, and 0.04 for r.
150 " 30t Multiply.
#13500
# " #3300t
# Divide each side by 30.
5 " t Simplify.
ANSWER It will take 5 years to earn $150 in interest.
Solve the following problems.
1. If you deposit $500 into an account that earns 6% simple annualinterest, what will the account’s balance be after 10 months?
2. You deposit $1000 into a 3 month certificate of deposit. After 3 months the balance is $1005. Find the simple annual interest rate.
Your turn now
When using thesimple interest formula,make sure you write thenumber of months as afraction of a year. Forexample, 7 months should
be written as #172#.
Watch Out!
Lesson 9.8 Simple Interest 455
E X A M P L E 2 Finding an Interest Rate
You deposit $600 into a 6 month certificate of deposit. After 6 months the balance is $618. Find the simple annual interest rate.
To find the interest, subtract the principal from the balance.
$618 ! $600 " $18
Use the simple interest formula and solve for r.
I " Prt Write simple interest formula.
18 " (600)(r)!#162#" Substitute 18 for I, 600 for P, and #1
62# for t.
18 " 300r Multiply.
#31080# " #
330000r
# Divide each side by 300.
0.06 " r Simplify.
6% " r Write decimal as a percent.
ANSWER The simple annual interest rate is 6%.
2
1
E X A M P L E 3 Finding an Amount of Time
You put $750 into a certificate of deposit. Your simple annualinterest rate is 4%. You receive a check for the interest at the endof each year. How long will it take to earn $150 in interest?
I " Prt Write simple interest formula.
150 " (750)(0.04)t Substitute 150 for I, 750 for P, and 0.04 for r.
150 " 30t Multiply.
#13500
# " #3300t
# Divide each side by 30.
5 " t Simplify.
ANSWER It will take 5 years to earn $150 in interest.
Solve the following problems.
1. If you deposit $500 into an account that earns 6% simple annualinterest, what will the account’s balance be after 10 months?
2. You deposit $1000 into a 3 month certificate of deposit. After 3 months the balance is $1005. Find the simple annual interest rate.
Your turn now
When using thesimple interest formula,make sure you write thenumber of months as afraction of a year. Forexample, 7 months should
be written as #172#.
Watch Out!
Lesson 9.8 Simple Interest 455
E X A M P L E 2 Finding an Interest Rate
You deposit $600 into a 6 month certificate of deposit. After 6 months the balance is $618. Find the simple annual interest rate.
To find the interest, subtract the principal from the balance.
$618 ! $600 " $18
Use the simple interest formula and solve for r.
I " Prt Write simple interest formula.
18 " (600)(r)!#162#" Substitute 18 for I, 600 for P, and #1
62# for t.
18 " 300r Multiply.
#31080# " #
330000r
# Divide each side by 300.
0.06 " r Simplify.
6% " r Write decimal as a percent.
ANSWER The simple annual interest rate is 6%.
2
1
E X A M P L E 3 Finding an Amount of Time
You put $750 into a certificate of deposit. Your simple annualinterest rate is 4%. You receive a check for the interest at the endof each year. How long will it take to earn $150 in interest?
I " Prt Write simple interest formula.
150 " (750)(0.04)t Substitute 150 for I, 750 for P, and 0.04 for r.
150 " 30t Multiply.
#13500
# " #3300t
# Divide each side by 30.
5 " t Simplify.
ANSWER It will take 5 years to earn $150 in interest.
Solve the following problems.
1. If you deposit $500 into an account that earns 6% simple annualinterest, what will the account’s balance be after 10 months?
2. You deposit $1000 into a 3 month certificate of deposit. After 3 months the balance is $1005. Find the simple annual interest rate.
Your turn now
When using thesimple interest formula,make sure you write thenumber of months as afraction of a year. Forexample, 7 months should
be written as #172#.
Watch Out!
Lesson 9.8 Simple Interest 455
E X A M P L E 2 Finding an Interest Rate
You deposit $600 into a 6 month certificate of deposit. After 6 months the balance is $618. Find the simple annual interest rate.
To find the interest, subtract the principal from the balance.
$618 ! $600 " $18
Use the simple interest formula and solve for r.
I " Prt Write simple interest formula.
18 " (600)(r)!#162#" Substitute 18 for I, 600 for P, and #1
62# for t.
18 " 300r Multiply.
#31080# " #
330000r
# Divide each side by 300.
0.06 " r Simplify.
6% " r Write decimal as a percent.
ANSWER The simple annual interest rate is 6%.
2
1
E X A M P L E 3 Finding an Amount of Time
You put $750 into a certificate of deposit. Your simple annualinterest rate is 4%. You receive a check for the interest at the endof each year. How long will it take to earn $150 in interest?
I " Prt Write simple interest formula.
150 " (750)(0.04)t Substitute 150 for I, 750 for P, and 0.04 for r.
150 " 30t Multiply.
#13500
# " #3300t
# Divide each side by 30.
5 " t Simplify.
ANSWER It will take 5 years to earn $150 in interest.
Solve the following problems.
1. If you deposit $500 into an account that earns 6% simple annualinterest, what will the account’s balance be after 10 months?
2. You deposit $1000 into a 3 month certificate of deposit. After 3 months the balance is $1005. Find the simple annual interest rate.
Your turn now
When using thesimple interest formula,make sure you write thenumber of months as afraction of a year. Forexample, 7 months should
be written as #172#.
Watch Out!
Lesson 9.8 Simple Interest 455
E X A M P L E 2 Finding an Interest Rate
You deposit $600 into a 6 month certificate of deposit. After 6 months the balance is $618. Find the simple annual interest rate.
To find the interest, subtract the principal from the balance.
$618 ! $600 " $18
Use the simple interest formula and solve for r.
I " Prt Write simple interest formula.
18 " (600)(r)!#162#" Substitute 18 for I, 600 for P, and #1
62# for t.
18 " 300r Multiply.
#31080# " #
330000r
# Divide each side by 300.
0.06 " r Simplify.
6% " r Write decimal as a percent.
ANSWER The simple annual interest rate is 6%.
2
1
E X A M P L E 3 Finding an Amount of Time
You put $750 into a certificate of deposit. Your simple annualinterest rate is 4%. You receive a check for the interest at the endof each year. How long will it take to earn $150 in interest?
I " Prt Write simple interest formula.
150 " (750)(0.04)t Substitute 150 for I, 750 for P, and 0.04 for r.
150 " 30t Multiply.
#13500
# " #3300t
# Divide each side by 30.
5 " t Simplify.
ANSWER It will take 5 years to earn $150 in interest.
Solve the following problems.
1. If you deposit $500 into an account that earns 6% simple annualinterest, what will the account’s balance be after 10 months?
2. You deposit $1000 into a 3 month certificate of deposit. After 3 months the balance is $1005. Find the simple annual interest rate.
Your turn now
When using thesimple interest formula,make sure you write thenumber of months as afraction of a year. Forexample, 7 months should
be written as #172#.
Watch Out!
Lesson 9.8 Simple Interest 455
E X A M P L E 2 Finding an Interest Rate
You deposit $600 into a 6 month certificate of deposit. After 6 months the balance is $618. Find the simple annual interest rate.
To find the interest, subtract the principal from the balance.
$618 ! $600 " $18
Use the simple interest formula and solve for r.
I " Prt Write simple interest formula.
18 " (600)(r)!#162#" Substitute 18 for I, 600 for P, and #1
62# for t.
18 " 300r Multiply.
#31080# " #
330000r
# Divide each side by 300.
0.06 " r Simplify.
6% " r Write decimal as a percent.
ANSWER The simple annual interest rate is 6%.
2
1
E X A M P L E 3 Finding an Amount of Time
You put $750 into a certificate of deposit. Your simple annualinterest rate is 4%. You receive a check for the interest at the endof each year. How long will it take to earn $150 in interest?
I " Prt Write simple interest formula.
150 " (750)(0.04)t Substitute 150 for I, 750 for P, and 0.04 for r.
150 " 30t Multiply.
#13500
# " #3300t
# Divide each side by 30.
5 " t Simplify.
ANSWER It will take 5 years to earn $150 in interest.
Solve the following problems.
1. If you deposit $500 into an account that earns 6% simple annualinterest, what will the account’s balance be after 10 months?
2. You deposit $1000 into a 3 month certificate of deposit. After 3 months the balance is $1005. Find the simple annual interest rate.
Your turn now
When using thesimple interest formula,make sure you write thenumber of months as afraction of a year. Forexample, 7 months should
be written as #172#.
Watch Out!
Lesson 9.8 Simple Interest 455
E X A M P L E 2 Finding an Interest Rate
You deposit $600 into a 6 month certificate of deposit. After 6 months the balance is $618. Find the simple annual interest rate.
To find the interest, subtract the principal from the balance.
$618 ! $600 " $18
Use the simple interest formula and solve for r.
I " Prt Write simple interest formula.
18 " (600)(r)!#162#" Substitute 18 for I, 600 for P, and #1
62# for t.
18 " 300r Multiply.
#31080# " #
330000r
# Divide each side by 300.
0.06 " r Simplify.
6% " r Write decimal as a percent.
ANSWER The simple annual interest rate is 6%.
2
1
E X A M P L E 3 Finding an Amount of Time
You put $750 into a certificate of deposit. Your simple annualinterest rate is 4%. You receive a check for the interest at the endof each year. How long will it take to earn $150 in interest?
I " Prt Write simple interest formula.
150 " (750)(0.04)t Substitute 150 for I, 750 for P, and 0.04 for r.
150 " 30t Multiply.
#13500
# " #3300t
# Divide each side by 30.
5 " t Simplify.
ANSWER It will take 5 years to earn $150 in interest.
Solve the following problems.
1. If you deposit $500 into an account that earns 6% simple annualinterest, what will the account’s balance be after 10 months?
2. You deposit $1000 into a 3 month certificate of deposit. After 3 months the balance is $1005. Find the simple annual interest rate.
Your turn now
When using thesimple interest formula,make sure you write thenumber of months as afraction of a year. Forexample, 7 months should
be written as #172#.
Watch Out!
Lesson 9.8 Simple Interest 455
E X A M P L E 2 Finding an Interest Rate
You deposit $600 into a 6 month certificate of deposit. After 6 months the balance is $618. Find the simple annual interest rate.
To find the interest, subtract the principal from the balance.
$618 ! $600 " $18
Use the simple interest formula and solve for r.
I " Prt Write simple interest formula.
18 " (600)(r)!#162#" Substitute 18 for I, 600 for P, and #1
62# for t.
18 " 300r Multiply.
#31080# " #
330000r
# Divide each side by 300.
0.06 " r Simplify.
6% " r Write decimal as a percent.
ANSWER The simple annual interest rate is 6%.
2
1
E X A M P L E 3 Finding an Amount of Time
You put $750 into a certificate of deposit. Your simple annualinterest rate is 4%. You receive a check for the interest at the endof each year. How long will it take to earn $150 in interest?
I " Prt Write simple interest formula.
150 " (750)(0.04)t Substitute 150 for I, 750 for P, and 0.04 for r.
150 " 30t Multiply.
#13500
# " #3300t
# Divide each side by 30.
5 " t Simplify.
ANSWER It will take 5 years to earn $150 in interest.
Solve the following problems.
1. If you deposit $500 into an account that earns 6% simple annualinterest, what will the account’s balance be after 10 months?
2. You deposit $1000 into a 3 month certificate of deposit. After 3 months the balance is $1005. Find the simple annual interest rate.
Your turn now
When using thesimple interest formula,make sure you write thenumber of months as afraction of a year. Forexample, 7 months should
be written as #172#.
Watch Out!
Lesson 9.8 Simple Interest 455
E X A M P L E 2 Finding an Interest Rate
You deposit $600 into a 6 month certificate of deposit. After 6 months the balance is $618. Find the simple annual interest rate.
To find the interest, subtract the principal from the balance.
$618 ! $600 " $18
Use the simple interest formula and solve for r.
I " Prt Write simple interest formula.
18 " (600)(r)!#162#" Substitute 18 for I, 600 for P, and #1
62# for t.
18 " 300r Multiply.
#31080# " #
330000r
# Divide each side by 300.
0.06 " r Simplify.
6% " r Write decimal as a percent.
ANSWER The simple annual interest rate is 6%.
2
1
E X A M P L E 3 Finding an Amount of Time
You put $750 into a certificate of deposit. Your simple annualinterest rate is 4%. You receive a check for the interest at the endof each year. How long will it take to earn $150 in interest?
I " Prt Write simple interest formula.
150 " (750)(0.04)t Substitute 150 for I, 750 for P, and 0.04 for r.
150 " 30t Multiply.
#13500
# " #3300t
# Divide each side by 30.
5 " t Simplify.
ANSWER It will take 5 years to earn $150 in interest.
Solve the following problems.
1. If you deposit $500 into an account that earns 6% simple annualinterest, what will the account’s balance be after 10 months?
2. You deposit $1000 into a 3 month certificate of deposit. After 3 months the balance is $1005. Find the simple annual interest rate.
Your turn now
When using thesimple interest formula,make sure you write thenumber of months as afraction of a year. Forexample, 7 months should
be written as #172#.
Watch Out!
Lesson 9.8 Simple Interest 455
E X A M P L E 2 Finding an Interest Rate
You deposit $600 into a 6 month certificate of deposit. After 6 months the balance is $618. Find the simple annual interest rate.
To find the interest, subtract the principal from the balance.
$618 ! $600 " $18
Use the simple interest formula and solve for r.
I " Prt Write simple interest formula.
18 " (600)(r)!#162#" Substitute 18 for I, 600 for P, and #1
62# for t.
18 " 300r Multiply.
#31080# " #
330000r
# Divide each side by 300.
0.06 " r Simplify.
6% " r Write decimal as a percent.
ANSWER The simple annual interest rate is 6%.
2
1
E X A M P L E 3 Finding an Amount of Time
You put $750 into a certificate of deposit. Your simple annualinterest rate is 4%. You receive a check for the interest at the endof each year. How long will it take to earn $150 in interest?
I " Prt Write simple interest formula.
150 " (750)(0.04)t Substitute 150 for I, 750 for P, and 0.04 for r.
150 " 30t Multiply.
#13500
# " #3300t
# Divide each side by 30.
5 " t Simplify.
ANSWER It will take 5 years to earn $150 in interest.
Solve the following problems.
1. If you deposit $500 into an account that earns 6% simple annualinterest, what will the account’s balance be after 10 months?
2. You deposit $1000 into a 3 month certificate of deposit. After 3 months the balance is $1005. Find the simple annual interest rate.
Your turn now
When using thesimple interest formula,make sure you write thenumber of months as afraction of a year. Forexample, 7 months should
be written as #172#.
Watch Out!
Lesson 9.8 Simple Interest 455
E X A M P L E 2 Finding an Interest Rate
You deposit $600 into a 6 month certificate of deposit. After 6 months the balance is $618. Find the simple annual interest rate.
To find the interest, subtract the principal from the balance.
$618 ! $600 " $18
Use the simple interest formula and solve for r.
I " Prt Write simple interest formula.
18 " (600)(r)!#162#" Substitute 18 for I, 600 for P, and #1
62# for t.
18 " 300r Multiply.
#31080# " #
330000r
# Divide each side by 300.
0.06 " r Simplify.
6% " r Write decimal as a percent.
ANSWER The simple annual interest rate is 6%.
2
1
E X A M P L E 3 Finding an Amount of Time
You put $750 into a certificate of deposit. Your simple annualinterest rate is 4%. You receive a check for the interest at the endof each year. How long will it take to earn $150 in interest?
I " Prt Write simple interest formula.
150 " (750)(0.04)t Substitute 150 for I, 750 for P, and 0.04 for r.
150 " 30t Multiply.
#13500
# " #3300t
# Divide each side by 30.
5 " t Simplify.
ANSWER It will take 5 years to earn $150 in interest.
Solve the following problems.
1. If you deposit $500 into an account that earns 6% simple annualinterest, what will the account’s balance be after 10 months?
2. You deposit $1000 into a 3 month certificate of deposit. After 3 months the balance is $1005. Find the simple annual interest rate.
Your turn now
When using thesimple interest formula,make sure you write thenumber of months as afraction of a year. Forexample, 7 months should
be written as #172#.
Watch Out!
Lesson 9.8 Simple Interest 455
E X A M P L E 2 Finding an Interest Rate
You deposit $600 into a 6 month certificate of deposit. After 6 months the balance is $618. Find the simple annual interest rate.
To find the interest, subtract the principal from the balance.
$618 ! $600 " $18
Use the simple interest formula and solve for r.
I " Prt Write simple interest formula.
18 " (600)(r)!#162#" Substitute 18 for I, 600 for P, and #1
62# for t.
18 " 300r Multiply.
#31080# " #
330000r
# Divide each side by 300.
0.06 " r Simplify.
6% " r Write decimal as a percent.
ANSWER The simple annual interest rate is 6%.
2
1
E X A M P L E 3 Finding an Amount of Time
You put $750 into a certificate of deposit. Your simple annualinterest rate is 4%. You receive a check for the interest at the endof each year. How long will it take to earn $150 in interest?
I " Prt Write simple interest formula.
150 " (750)(0.04)t Substitute 150 for I, 750 for P, and 0.04 for r.
150 " 30t Multiply.
#13500
# " #3300t
# Divide each side by 30.
5 " t Simplify.
ANSWER It will take 5 years to earn $150 in interest.
Solve the following problems.
1. If you deposit $500 into an account that earns 6% simple annualinterest, what will the account’s balance be after 10 months?
2. You deposit $1000 into a 3 month certificate of deposit. After 3 months the balance is $1005. Find the simple annual interest rate.
Your turn now
When using thesimple interest formula,make sure you write thenumber of months as afraction of a year. Forexample, 7 months should
be written as #172#.
Watch Out!
ExercisesMore Practice, p. 713
456 Chapter 9 Percents
For an account that earns simple annual interest, find the interestand the balance of the account.
8. $252 at 8% for 2 months 9. $450 at 4% for 6 months
10. $6240 at 10% for 9 months 11. $2000 at 9.6% for 8 months
12. $5000 at 4.5% for 1 year 13. $400 at 3% for 1 month
Use the simple interest formula to find the unknown quantity.
14. I ! _?_ 15. I ! $84 16. I ! $468 17. I ! $9P ! $2000 P ! _?_ P ! $6240 P ! $450r ! 9.8% r ! 7% r ! _?_ r ! 4%t ! 5 years t ! 2 years t ! 9 months t ! _?_
18. Writing If you borrow money, would you want a higher or lowerinterest rate? If you open a savings account, would you want a higheror a lower interest rate? Explain.
19. Security Deposit When signing a lease for an apartment, your sisterpays a security deposit that earns 3.5% simple annual interest. At theend of a year, the interest earned on the security deposit is $17.50. Howmuch was the security deposit?
20. Critical Thinking Three months ago you deposited $250 into a savingsaccount, and now your balance is $253. Eight months ago your frienddeposited $250 into a different savings account, and her balance is now$257.50. Which account has the greater simple annual interest rate?
Practice and Problem Solving
1. Vocabulary What is the amount of money deposited or borrowed called?
For an account that earns simple annual interest, find the interestand the balance of the account.
2. $30 at 1% for 10 months 3. $100 at 8% for 3 years
4. $50 at 10% for 4 years 5. $200 at 4.5% for 8 months
6. Investments You deposit $250 into a 6 month certificate of deposit. Atthe end of the 6 months your balance is $255. What is the simpleannual interest rate?
7. Savings Suppose you put $750 into a savings account that earns 2% simple annual interest. How long will it take to have $45 in interest?
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ExercisesMore Practice, p. 713
456 Chapter 9 Percents
For an account that earns simple annual interest, find the interestand the balance of the account.
8. $252 at 8% for 2 months 9. $450 at 4% for 6 months
10. $6240 at 10% for 9 months 11. $2000 at 9.6% for 8 months
12. $5000 at 4.5% for 1 year 13. $400 at 3% for 1 month
Use the simple interest formula to find the unknown quantity.
14. I ! _?_ 15. I ! $84 16. I ! $468 17. I ! $9P ! $2000 P ! _?_ P ! $6240 P ! $450r ! 9.8% r ! 7% r ! _?_ r ! 4%t ! 5 years t ! 2 years t ! 9 months t ! _?_
18. Writing If you borrow money, would you want a higher or lowerinterest rate? If you open a savings account, would you want a higheror a lower interest rate? Explain.
19. Security Deposit When signing a lease for an apartment, your sisterpays a security deposit that earns 3.5% simple annual interest. At theend of a year, the interest earned on the security deposit is $17.50. Howmuch was the security deposit?
20. Critical Thinking Three months ago you deposited $250 into a savingsaccount, and now your balance is $253. Eight months ago your frienddeposited $250 into a different savings account, and her balance is now$257.50. Which account has the greater simple annual interest rate?
Practice and Problem Solving
1. Vocabulary What is the amount of money deposited or borrowed called?
For an account that earns simple annual interest, find the interestand the balance of the account.
2. $30 at 1% for 10 months 3. $100 at 8% for 3 years
4. $50 at 10% for 4 years 5. $200 at 4.5% for 8 months
6. Investments You deposit $250 into a 6 month certificate of deposit. Atthe end of the 6 months your balance is $255. What is the simpleannual interest rate?
7. Savings Suppose you put $750 into a savings account that earns 2% simple annual interest. How long will it take to have $45 in interest?
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Lesson 9.8 Simple Interest 457
21. Savings Suppose Ann has $300 in a savings account that earns 1.75%simple annual interest. In how many years will she have $21 in interest?
22. Credit Cards A credit card charges 9.6% annual interest on any unpaidbalance each month. During the past month your older brother had anunpaid balance of $375 from the purchase of a computer desk. What isthe interest charge for that month?
23. Challenge Suppose you put $500 in a savings account that earns 4.5%simple annual interest, and your friend puts $400 in a savings accountthat earns 6% simple annual interest. Which of you will earn $600 first?
Solve the equation. (Lesson 7.5)
24. 5x ! 4 " #21 25. #6 # 12y " #54 26. $7z
$ # 8 " 3
27. $5x
$ ! 2 " 12 28. 5 " 3n # 4 29. #2y # 8 " #10
Choose a Strategy Use a strategy fromthe list to solve the following problem.Explain your choice of strategy.
30. Your friends Tom, Ryan, Jen, Matt, and Alline up in a row. Tom, Jen, and Ryan arenot next to each other. Tom is at oneend. Two people separate Jen and Matt.Between which two people is Al?
Copy and complete the statement using <, >, or !.
31. 2 h 24 min _?_ 148 min 32. 13 wk 4 d _?_ 95 d
33. 9 d 17 h _?_ 220 h 34. 4782 sec _?_ 48 min 16 sec
Basic Skills
Mixed Review
35. Multiple Choice Joe put $350 into a 6 month certificate of deposit.After 6 months, the certificate earned 4.2% simple annual interest. Howmuch interest did the certificate earn?
A. $7.35 B. $14.70 C. $29.40 D. $88.20
36. Short Response Rick wants to borrow $4500 to buy a used car. Hissister will lend him the money at a simple annual interest rate of 9% for 6 years. Rick’s uncle will lend him the money at a simple annualinterest rate of 11.5% for 4 years. From which relative should Rickborrow the money? Explain.
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Problem Solving Strategies■ Work Backward■ Make a List■ Act it Out
Answer each ques-on in your notes
Compound Interest
A = P(1 + r)t
P = original amount deposited
r = interest rate (percent as a decimal)
t = time
3. You deposit $1,600 in an account that pays 4% interest compounded yearly. Find the balance at the end of 7 years. P = __________ r = __________ t = __________
4. You deposit money in an account that pays 3.5% interest compounded yearly. Find the balance after 5 years for an initial amount of $750. P = __________ r = __________ t = __________
5. You deposit $2,000 in an account that compounds interest yearly. Find the balance after 10 years for an interest rate of 6%. P = __________ r = __________ t = __________
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Compound Interest
A = P(1 + r)t
P = original amount deposited
r = interest rate (percent as a decimal)
t = time
3. You deposit $1,600 in an account that pays 4% interest compounded yearly. Find the balance at the end of 7 years. P = __________ r = __________ t = __________
4. You deposit money in an account that pays 3.5% interest compounded yearly. Find the balance after 5 years for an initial amount of $750. P = __________ r = __________ t = __________
5. You deposit $2,000 in an account that compounds interest yearly. Find the balance after 10 years for an interest rate of 6%. P = __________ r = __________ t = __________
Compound Interest
A = P(1 + r)t
P = original amount deposited
r = interest rate (percent as a decimal)
t = time
3. You deposit $1,600 in an account that pays 4% interest compounded yearly. Find the balance at the end of 7 years. P = __________ r = __________ t = __________
4. You deposit money in an account that pays 3.5% interest compounded yearly. Find the balance after 5 years for an initial amount of $750. P = __________ r = __________ t = __________
5. You deposit $2,000 in an account that compounds interest yearly. Find the balance after 10 years for an interest rate of 6%. P = __________ r = __________ t = __________
Answer the question about the given investment.
7. What is the balance after 8 years if you deposit $1400 in an account that pays 6% interest compounded yearly?
8. What is the balance after 5 years if you deposit $350 in an account that pays 5% interest compounded yearly?
9. What is the balance after 10 years if you deposit $900 in an account that pays 7% interest compounded yearly?
Answer the question about the given investment.
7. What is the balance after 8 years if you deposit $1400 in an account that pays 6% interest compounded yearly?
8. What is the balance after 5 years if you deposit $350 in an account that pays 5% interest compounded yearly?
9. What is the balance after 10 years if you deposit $900 in an account that pays 7% interest compounded yearly?
Answer the question about the given investment.
7. What is the balance after 8 years if you deposit $1400 in an account that pays 6% interest compounded yearly?
8. What is the balance after 5 years if you deposit $350 in an account that pays 5% interest compounded yearly?
9. What is the balance after 10 years if you deposit $900 in an account that pays 7% interest compounded yearly?
Answer each ques-on in your notes
PreCalculus Name________________________ Interest Word Problems Date_________________
Congratulations!! You have just won $50,000! You decide to invest your money and the bank presents you with two investment options. You may either invest your $50,000 at 5% interest, compounded monthly, for a period of ten years OR you can invest that $50,000 at 5% interest, compounded continuously, for ten years. You must figure out which investment option will yield a greater profit.
You have already learned how to use the rules of exponents to solve math problems and to solve exponential equations. Now you will apply these concepts to solve interest problems.
There are several types of interest problems. This lesson deals with solving problems where
interest is compounded and where interest is continuous.
x To “compound” interest means adding the accumulated interest back to the original amount in the account.
x To “continuously compound” interest means adding interest every instant
The Compound Interest Formula is nt
nr
PA ¸¹·
¨©§ � 1
A represents P represents r represents t represents n represents Let’s try some examples using the Compound Interest Formula…
1. Suppose Wes has $1000 that he invests in an account that pays 3.5% interest compounded quarterly. How much money does Wes have at the end of 5 years? How much interest will he earn?
PreCalculus Name________________________ Interest Word Problems Date_________________
Congratulations!! You have just won $50,000! You decide to invest your money and the bank presents you with two investment options. You may either invest your $50,000 at 5% interest, compounded monthly, for a period of ten years OR you can invest that $50,000 at 5% interest, compounded continuously, for ten years. You must figure out which investment option will yield a greater profit.
You have already learned how to use the rules of exponents to solve math problems and to solve exponential equations. Now you will apply these concepts to solve interest problems.
There are several types of interest problems. This lesson deals with solving problems where
interest is compounded and where interest is continuous.
x To “compound” interest means adding the accumulated interest back to the original amount in the account.
x To “continuously compound” interest means adding interest every instant
The Compound Interest Formula is nt
nr
PA ¸¹·
¨©§ � 1
A represents P represents r represents t represents n represents Let’s try some examples using the Compound Interest Formula…
1. Suppose Wes has $1000 that he invests in an account that pays 3.5% interest compounded quarterly. How much money does Wes have at the end of 5 years? How much interest will he earn?
PreCalculus Name________________________ Interest Word Problems Date_________________
Congratulations!! You have just won $50,000! You decide to invest your money and the bank presents you with two investment options. You may either invest your $50,000 at 5% interest, compounded monthly, for a period of ten years OR you can invest that $50,000 at 5% interest, compounded continuously, for ten years. You must figure out which investment option will yield a greater profit.
You have already learned how to use the rules of exponents to solve math problems and to solve exponential equations. Now you will apply these concepts to solve interest problems.
There are several types of interest problems. This lesson deals with solving problems where
interest is compounded and where interest is continuous.
x To “compound” interest means adding the accumulated interest back to the original amount in the account.
x To “continuously compound” interest means adding interest every instant
The Compound Interest Formula is nt
nr
PA ¸¹·
¨©§ � 1
A represents P represents r represents t represents n represents Let’s try some examples using the Compound Interest Formula…
1. Suppose Wes has $1000 that he invests in an account that pays 3.5% interest compounded quarterly. How much money does Wes have at the end of 5 years? How much interest will he earn?
PreCalculus Name________________________ Interest Word Problems Date_________________
Congratulations!! You have just won $50,000! You decide to invest your money and the bank presents you with two investment options. You may either invest your $50,000 at 5% interest, compounded monthly, for a period of ten years OR you can invest that $50,000 at 5% interest, compounded continuously, for ten years. You must figure out which investment option will yield a greater profit.
You have already learned how to use the rules of exponents to solve math problems and to solve exponential equations. Now you will apply these concepts to solve interest problems.
There are several types of interest problems. This lesson deals with solving problems where
interest is compounded and where interest is continuous.
x To “compound” interest means adding the accumulated interest back to the original amount in the account.
x To “continuously compound” interest means adding interest every instant
The Compound Interest Formula is nt
nr
PA ¸¹·
¨©§ � 1
A represents P represents r represents t represents n represents Let’s try some examples using the Compound Interest Formula…
1. Suppose Wes has $1000 that he invests in an account that pays 3.5% interest compounded quarterly. How much money does Wes have at the end of 5 years? How much interest will he earn?
PreCalculus Name________________________ Interest Word Problems Date_________________
Congratulations!! You have just won $50,000! You decide to invest your money and the bank presents you with two investment options. You may either invest your $50,000 at 5% interest, compounded monthly, for a period of ten years OR you can invest that $50,000 at 5% interest, compounded continuously, for ten years. You must figure out which investment option will yield a greater profit.
You have already learned how to use the rules of exponents to solve math problems and to solve exponential equations. Now you will apply these concepts to solve interest problems.
There are several types of interest problems. This lesson deals with solving problems where
interest is compounded and where interest is continuous.
x To “compound” interest means adding the accumulated interest back to the original amount in the account.
x To “continuously compound” interest means adding interest every instant
The Compound Interest Formula is nt
nr
PA ¸¹·
¨©§ � 1
A represents P represents r represents t represents n represents Let’s try some examples using the Compound Interest Formula…
1. Suppose Wes has $1000 that he invests in an account that pays 3.5% interest compounded quarterly. How much money does Wes have at the end of 5 years? How much interest will he earn?
PreCalculus Name________________________ Interest Word Problems Date_________________
Congratulations!! You have just won $50,000! You decide to invest your money and the bank presents you with two investment options. You may either invest your $50,000 at 5% interest, compounded monthly, for a period of ten years OR you can invest that $50,000 at 5% interest, compounded continuously, for ten years. You must figure out which investment option will yield a greater profit.
You have already learned how to use the rules of exponents to solve math problems and to solve exponential equations. Now you will apply these concepts to solve interest problems.
There are several types of interest problems. This lesson deals with solving problems where
interest is compounded and where interest is continuous.
x To “compound” interest means adding the accumulated interest back to the original amount in the account.
x To “continuously compound” interest means adding interest every instant
The Compound Interest Formula is nt
nr
PA ¸¹·
¨©§ � 1
A represents P represents r represents t represents n represents Let’s try some examples using the Compound Interest Formula…
1. Suppose Wes has $1000 that he invests in an account that pays 3.5% interest compounded quarterly. How much money does Wes have at the end of 5 years? How much interest will he earn?
PreCalculus Name________________________ Interest Word Problems Date_________________
1ntrA P
n§ · �¨ ¸© ¹
2. William wants to have a total of $4000 in two years so that he can put a hot tub on his deck.
He finds an account that pays 5% interest compounded monthly. How much should William put into this account so that he’ll have $4000 at the end of two years?
3. Suppose William, from our last example, only has $3500 to invest but still wants $4000 for a hot tub. He finds a bank offering 5.25% interest compounded quarterly. How long will he have to leave his money in the account to have $4000?
PreCalculus Name________________________ Interest Word Problems Date_________________
1ntrA P
n§ · �¨ ¸© ¹
2. William wants to have a total of $4000 in two years so that he can put a hot tub on his deck.
He finds an account that pays 5% interest compounded monthly. How much should William put into this account so that he’ll have $4000 at the end of two years?
3. Suppose William, from our last example, only has $3500 to invest but still wants $4000 for a hot tub. He finds a bank offering 5.25% interest compounded quarterly. How long will he have to leave his money in the account to have $4000?
PreCalculus Name________________________ Interest Word Problems Date_________________
1ntrA P
n§ · �¨ ¸© ¹
2. William wants to have a total of $4000 in two years so that he can put a hot tub on his deck.
He finds an account that pays 5% interest compounded monthly. How much should William put into this account so that he’ll have $4000 at the end of two years?
3. Suppose William, from our last example, only has $3500 to invest but still wants $4000 for a hot tub. He finds a bank offering 5.25% interest compounded quarterly. How long will he have to leave his money in the account to have $4000?
PreCalculus Name________________________ Interest Word Problems Date_________________
1ntrA P
n§ · �¨ ¸© ¹
2. William wants to have a total of $4000 in two years so that he can put a hot tub on his deck.
He finds an account that pays 5% interest compounded monthly. How much should William put into this account so that he’ll have $4000 at the end of two years?
3. Suppose William, from our last example, only has $3500 to invest but still wants $4000 for a hot tub. He finds a bank offering 5.25% interest compounded quarterly. How long will he have to leave his money in the account to have $4000?
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