3.6 Simple Interest Formula

If you have an interest rate of 6.5%, what is the decimal form?

If you have an interest rate of 22%, what is the decimal form?

If you have an interest rate of 9%, what is the decimal form?

If you borrow money for 6 months, what do you use for the fraction of years?

​Maggie put $580 into a savings account. The account pays 2.5% simple interest each year. If she neither adds or withdraws money from the account, how much interest will she earn after two years?

WHAT DO WE USE IN THE EQUATION FOR YEARS?

​Maggie put $580 into a savings account. The account pays 2.5% simple interest each year. If she neither adds or withdraws money from the account, how much interest will she earn after two years?

WHAT DO WE USE FOR THE RATE?

​Maggie put $580 into a savings account. The account pays 2.5% simple interest each year. If she neither adds or withdraws money from the account, how much interest will she earn after two years?

WHAT DO WE USE FOR THE PRINCIPAL?

​Maggie put $580 into a savings account. The account pays 2.5% simple interest each year. If she neither adds or withdraws money from the account, how much interest will she earn after two years?

If we use the equation below, how much interest does she make?

I = 580 x 0.025 x 2

Carrie invests $430 into a savings account. The account pays 3% simple interest on an annual basis. If she does not add or withdraw money, how much interest will she earn after 18 months?

WHAT DO WE USE FOR THE RATE?

Carrie invests $430 into a savings account. The account pays 3% simple interest on an annual basis. If she does not add or withdraw money, how much interest will she earn after 18 months?

WHAT DO WE USE FOR THE YEARS?

Carrie invests $430 into a savings account. The account pays 3% simple interest on an annual basis. If she does not add or withdraw money, how much interest will she earn after 18 months?

NOW SOLVE FOR CARRIE'S INTEREST USING THE FORMULA:

I = 430 X .03 X 1.5

Rodell’s parents are starting a real estate business. They borrow $99,400 from the bank to finance their start-up operations. The simple interest rate is 4.75% per year, and they plan to take 15 years to repay the loan.

Find the interest on their loan.

Abbie borrows $3,216 at a rate of 6.8% per year. How much simple interest will she owe if it takes 2 years to repay the loan?

Use I = P x R x T and solve for her interest. (Round to the hundredths place)

Jeremy borrows $14,280 at a rate of 3.8% per year. How much simple interest will he owe if it takes 6 months to repay the loan?

I = P x R x T

Hint: Time in YEARS

Harmon is depositing $5,500 into a savings account with a simple interest rate 5.4%. She plans on leaving her money in the account for 7 years, what interest will she earn on her money?

I = P x R x T