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Name______________________________Date: _______________Math 7AC Calculating Simple InterestSimple interest is the amount of money paid or earned for the use of money. To find simple interest, use the following formula: I = prt Where: I = Interest p = principal (the amount of money deposited or invested)r = rate (the annual interest rate written as a decimal) t = time (the amount of time the money is invested in years)Example: Find the simple interest earned in a savings account where $136 is deposited for 2 years if the interest rate is 7.5% per year.Use the I = prt formula for simple interest. I = 136 ? 0.075 ? 2 Replace p with $136, r with 0.075, and t with 2. I = 20.40 SimplifyThe simple interest earned is $20.40.I = prtI = 600 · 0.085 · 0.5I = 25.50The simple interest is $25.50.Example: Find the simple interest for $600 invested at 8.5% for 6 months.Formula for simple interestp = $600, r = 0.085, t = 0.5Simplify.6 months = 612or 0.5 year Write time in yearsFind the simple interest earned to nearest cent for each principal, interest rate and time.$500, 4%, 2 years$75, 6.5%, 9 months$3,500, 4.2%, 1 ? years$1,245, 5.4%, 6 monthsHow much interest will Hannah earn in 4 years if she deposits $630 in a savings account at 6.5%?** To find the total amount due or earned, add the interest to the principal.Example: Mr. Stern deposited $490 in an account at 8 12 % per year for 6 months. How much will be in his bank account at the end of the 6 months? I = prt I = 490 ? 0.085 ? 0.5 I = $20.825 or $20.83 Find the total amount of money in the savings account. $490.00 + $20.83 = $510.83 * Add the interest to the original amountWhen Melissa was born, her parents put $8,000 into a college fund account that earned 9% simple interest. Find the total amount in the account after 18 years.Homework: Simple InterestFor #'s 1 - 6, Find the simple interest earned to nearest cent for each principal, interest rate and time.$1,150, 7.6%, 5 years $120, 4%, 6 months$450, 3%, 3 years$568, 16%, 18 months$800, 9%, 4 years$300 at 15% for 14 monthsRound each answer to the nearest cent.7. Terry invested $2,200 in the stock market for 2 years. If the investment earned 12%, how much money did Terry earn in 2 years?8. Mr. Pham has $410,000 in a retirement account that earns 3.85% simple interest each year. Find the amount earned each year by this investment.9. Mona opened a savings account with a $500 deposit and a simple interest rate of 5.6%. If there were no deposits or withdrawals, how much money is in the account after 812 years?10. Raj won $900,000 in a regional lottery. After paying $350,000 in taxes, he invested the remaining money in a savings account at 4.25% simple interest. How much money is in the account if Raj makes no deposits or withdrawals for two years?11. You received $125 for your birthday and deposited it into your savings account. The account earns 5.18% interest annually. If you keep the money in your bank account for 18 months, how much interest will you earn? What will your new account balance be?12. A savings account starts with $725. If the simple interest rate is 7%, find the total amount in the account after 9 months.13. Mr. Fraser bought new shingles for his house for $3,500 using a credit card. His card has an interest rate of 17%. If he does not pay off his balance at the end of the month and has no other charges, how much money will he owe on his credit card at the end of the month? ................
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