Simple Interest

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Simple Interest
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is money added onto the
original amount saved (earned) or borrowed
(charged).
Simple Interest
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Simple Interest Formula
I prt
I (Interest) - The amount earned or the amount
charged p (Principal)- The amount borrowed or
deposited r (Rate) Percent at which the
interest is charged t (Time)- In years or months
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Calculating Simple Interest
How much money would you pay in interest if
you borrowed 1,600 for 1 ½ years at 16 APR?
Convert the percent to a decimal.
16 .16
I prt
I 1,600 x .16 x 1.5
I 384
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Shawnique bought a beautiful house for 350,000.
Her loan was for 30 years at 6.5 APR. How much
money will she end up paying in interest?
6.5 . 065
I prt I 350,000 x .065 x 30 I 682,500
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Kent put 8,500 into an 18 month CD. The
interest rate is 3.25 How much money will Kent
earn in interest?
3.25 . 0325, 18 mo1.5 years
I prt I 8,500 x .0325 x 1.5 I 414.38
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Katie bought a new sports car for 28,500. She
financed her car for 6 years at 6.75APR. How
much will she end up paying for interest on her
car?
6.75 . 0675
I prt I 28,500 x .0675 x 6 I 11,542.50
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Cody bought a new truck for 25,000. He took out
a loan for 5 ½ years with 7.75 APR. How much
will Cody end up paying in interest?
7.75 . 0775
I prt I 25,000 x .0775 x 5.5 I 10,656.25
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Tia saved her 9,000 for 2 ½ years at 4.25 APR
in a CD, to go on a month long vacation with her
family. How much did she earn in interest?
4.25 . 0425
I prt I 9,000 x .0425 x 2.5 I 956.25