​Interest = Principal x Rate x Time

​(copy this down in your notes)

​Interest = Principal x Rate x Time

Example...1

• ​Principal: $200

• ​Rate: 3%

• ​Time: 5 years

​Interest = Principal x Rate x Time

Example...2

• ​Principal: $1,000

• ​Rate: 8.3%

• ​Time: 18 months

​Interest = Principal x Rate x Time

Example...3

• You need a loan of $600 to fix the basement in your house. The bank loaned you the money at 10% interest for 2 years.

• ​How much do you pay in interest?

• ​What is the total amount you will have to pay back to the bank?

​Interest = Principal x Rate x Time

Remember principal is the starting amount for the LOAN

• You saved up some money for a new car that costs $32,000. You have $200 to put down (pay right now) but need a loan for the rest of the cost, $31,800. The car dealership offers you a deal of 0.17% interest for 5 years.

• ​How much will you pay in interest?

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• ​What is the total amount you will end up paying for the car?