1. Simple Interest Learn to solve problems involving simple interest.
Course 2
Simple Interest
Learn to solve problems involving simple interest.

2. Insert Lesson Title Here
Course 2
Simple Interest
Insert Lesson Title Here
Vocabulary
interest
simple interest
principal

3. Course 2
Simple Interest
One type of interest, called simple interest, is money paid only on the principal. The principal is the amount of money deposited or borrowed. To solve problems involving simple interest, you can use the following formula.
Rate of interest per year
(as a decimal)
Interest
I = P · r · t
Time in years that the
money earns interest
Principal

4. Example 1: Using the Simple Interest Formula
Course 2
Simple Interest
Example 1: Using the Simple Interest Formula
Find the missing value.
I =
, P = $575, r = 8%, t = 3 years
I = P · r · t
I = 575 · 0.08 · 3
Substitute. Use 0.08 for 8%.
I = $138
Multiply.
The simple interest is $

5. Example 2: Using the Simple Interest Formula
Course 2
Simple Interest
Example 2: Using the Simple Interest Formula
Find the missing value.
I = $204, P = $1,700, r =
, t = 6 years
I = P · r · t
204 = 1,700 · r · 6
Substitute.
204 = 10,200r
Multiply.
204
10,200 =
10,200r
Divide by 10,200 to isolate the variable.
0.02 = r
The interest rate is 2%

6. Simple Interest Example 3 Find the missing value. I =
Course 2
Simple Interest
Example 3
Find the missing value.
I =
, P = $525, r = 7%, t = 2 years
I = P · r · t
I = 525 · 0.07 · 2
Substitute. Use 0.07 for 7%.
I = $73.50
Multiply.
The simple interest is $73.50.

7. Simple Interest Example 4 Find the missing value.
Course 2
Simple Interest
Example 4
Find the missing value.
I = $600, P = $2,000, r =
, t = 3 years
I = P · r · t
600 = 2,000 · r · 3
Substitute.
600 = 6,000r
Multiply.
600
6000 =
6,000r
6,000
Divide by 6,000 to isolate the variable.
0.1 = r
The interest rate is 10%