Presentation on theme: "Simple Interest examples: If you put $600 in a CD at a bank for 6 months at a simple annual rate of 4.9%, how much interest will you earn? How much money."— Presentation transcript:
Simple Interest examples: If you put $600 in a CD at a bank for 6 months at a simple annual rate of 4.9%, how much interest will you earn? How much money will you have in the account at the end of the 6 months?
You have to borrow $850 to buy Christmas gifts at a simple interest rate of 12%. Find the maturity value of the loan in 90 days.
Exact number of days in a year: 365 (or 366 in a leap year) Ordinary number of days in a year (for financial purposes): 360
Ordinary # of days: 360 One month = 30 days
Simple Interest Formulas I = Prt ( and then A = P + I ) A = P(1 + rt) ( and then I = A – P )
Seniors leave for college in about 8 months. You have saved $7000 but you need $7650 for tuition. At what simple annual interest rate would you need to invest your money in order to have enough for tuition? (Round answer to the nearest hundredth.)
Juniors have a little more time before starting college. If a universitys tuition is $10,000 but you only have $8000, how long would you have to leave your money in the bank with a simple annual interest rate of 8% for it to reach the cost of tuition?
Suppose you wish to accumulate $4000 in the next 9 months and a bank currently pays 6.5% simple annual interest. How much money would you need to start with?
Assignment: Study Guide #1 – 4 additional practice if needed p233 # 37 – 40, 42