1. Simple Interest Day 2
Formula
I = PRT

2. I = PRT
I = interest earned (amount of extra money the bank pays you or the amount of extra money that you owe)
P = Principle amount invested or borrowed.
R = Interest Rate usually given as a percent (must changed to decimal before plugging it into formula)
T = Time (must be measured in years) or converted to years by dividing by 12 months

3. I = PRT Solve for one of variables:
Review
I = PRT Solve for one of variables:
Solving for I
Plug in numbers for P, R, & T.
Then multiply
Solving for other variables
Plug in what you know.
Multiply the numbers that are on same side then divide by that answer. (Draw your river)

4. 1. With an annual interest rate of 6%, an account earned $180
1. With an annual interest rate of 6%, an account earned $ of simple interest in one year. How much money was originally deposited in the account?
Interest paid by bank
Principle (invested) is unknown
Rate changed to decimal
Time is 1 year
Multiply
Divide
I = PRT
180= P(.06)(1)
180 = .06P
3,000 = P
You originally deposited $3,000. That is the Principle!

5. You Try: I = PRT 581= P(.07)(2) 581 = .14P .14 .14 $4,150 =P
2. An account has an annual interest rate of 7% and earns $ of simple interest in two years. How much money was originally deposited in account?
I = PRT
581= P(.07)(2)
581 = .14P
$4,150 =P
Interest paid by bank
Principle (invested) is unknown
Rate changed to decimal
Time is 2 years
Multiply
Divide
You originally deposited $4,150. That is the Principle!

6. 3. If a saving account of $7,000 accumulates $910 of interest in the account after 2 years, what was the annual simple interest rate on the savings account?
Interest paid by bank
Principle (invested)
Rate is unknown
Time is 2 years
Regroup & Multiply
Divide
Change to %
I = PRT
910= 7,000(R)(2)
910 = (7,000)(2)R
910 = 14,000 R
14, ,000
0.065 = R
6.5% = R
The Interest Rate is 6.5%.

7. You Try:
4. If an investment of $2,000 accumulate $360 of interest in the account after 4 years, what was the annual simple interest rate on the savings account?
I = PRT
360= 2,000(R)(4)
360 = (2,000)(4)R
360 = 8,000 R
8,000 8,000
0.045 = R
4.5% = R
Interest paid by bank
Principle (invested)
Rate is unknown
Time is 4 years
Regroup & Multiply
Divide
Change to %
The Interest Rate is 4.5%.

8. I=PRT 209= 1900(R)(6/12) 209=(1900)(1/2)R 209=950R 950 950 0.22 = R
Challenge!!! You Try:
5. Sylvia got a 6-month loan of $ At the end of 6 months, she received a $209 simple interest. What rate of interest did the she pay?
I=PRT
209= 1900(R)(6/12)
209=(1900)(1/2)R
209=950R
0.22 = R
22% = R
Interest paid by bank
Principle (invested)
Rate is unknown
Time is 6 months
(divide by 12)
Regroup & Multiply
Divide
Change to %

9. I=PRT 525= 5000(.07)(T) 525=350T 350 350 1.5 = T Interest paid by bank
6. Adelynn got car loan for $ The annual interest rate is 7%. When she was done paying off her loan she had paid $5,525. How long did it take to pay off her loan?
= $525 in Interest
I=PRT
525= 5000(.07)(T)
525=350T
1.5 = T
Interest paid by bank
Principle (invested)
Rate is 7%
Time is unknown
Multiply
Divide
It took her 18 months or a year and a half to pay off her loan.

10. Practice