1. Simple Interest
Module 5 Lesson 3

2. Vocabulary
principal- the amount of money that is put into the bank or lent to someone that can earn interest. Interest- the money paid by a borrower for the use of borrowed money. simple interest- interest paid only on the original amount of money (and not on the interest already earned).

3. Simple Interest Formula
I = PRT
“I” stands for “simple interest”
“P” stands for “principal”
“R” stands for “the annual interest rate”
“T” stands for “time, in years”

4. Arnold puts $580 into a savings account
Arnold puts $580 into a savings account. The account pays 3% simple interest. How much interest will he earn in 6 months?
I= P= R= T=

5. Arnold puts $580 into a savings account
Arnold puts $580 into a savings account. The account pays 3% simple interest. How much interest will he earn in 5 years?
I= P= R= T=

6. John’s savings account pays 3. 25% interest
John’s savings account pays 3.25% interest. He has $1,200 in his account. How much interest will he earn in 3 years?
I= P= R= T=

7. John’s savings account pays 3. 25% interest
John’s savings account pays 3.25% interest. He has $1,200 in his account. How much interest will he earn in 9 months?
I= P= R= T=

8. Ronnie’s parents borrow $6,300 from the bank for a new car
Ronnie’s parents borrow $6,300 from the bank for a new car. The interest rate is 6% per year. How much simple interest will they pay if they take 2 years to repay the loan?
I= P= R= T=

9. Joey borrowed $2,600 from a bank to help pay for his college tuition
Joey borrowed $2,600 from a bank to help pay for his college tuition. The interest rate is 8% per year. How much simple interest will he pay if it takes him 5 years to repay the loan? I= P= R= T=

10. Derek’s dad bought new tires (for his truck) for $900 using a credit card. His card had an interest rate of 19%. If he has no other charges on his card and does not make a payment, how much money will he owe after one month?
I= P= R= T=

11. Alex paid for a plane ticket that cost $365 using a credit card
Alex paid for a plane ticket that cost $365 using a credit card. His card has an interest rate of 13.5%. If he has no other charges on his card and does not pay of his balance by the end of the month, how much money will he owe after one month?
I= P= R= T=

12. Lucas is taking out a car loan for $5,000
Lucas is taking out a car loan for $5,000. He plans on paying off the car loan in 2 years. At the end of 2 years, Lucas will have paid $300 in interest. What is the simple interest rate on the car loan? I= P= R= T=