2. Simple Interest 21.6

3. Vocabulary Principal = the original amount of money that is saved or borrowed. Simple interest = a fixed percent of the principal paid yearly.

4. Interest Formula (This formula is similar to d = rt) I = Interest P = Principal R = Interest rate per year T = Time, in years I = prt

5. Katrina puts $500 in a savings account at a simple interest rate of 6% per year for two years. How much interest will she earn? I = prt I = $500.06 2 I = $60

6. Bill borrows $500. He will repay it in 2 years at a simple interest rate of 8%. How much will he have to repay at the end of 2 years? I = prt I = $500.08 2 I = $80 $80 + $500 = $580 Bill will have to repay $580

7. Assignment - In Class Complete PW 21.6 –You may use a calculator Complete Ch. 21 Review (p. 414) –1-33 all –On lined paper –You may use a calculator