1. Find the simple interest if the principal is $500, the interest rate is 11% and the time is 2 years. MATH 110 Sec 8-2: Interest Practice Exercises

2. Find the simple interest if the principal is $500, the interest rate is 11% and the time is 2 years. MATH 110 Sec 8-2: Interest Practice Exercises

3. If the simple interest on $3000 for 9 years is $1620, then what is the rate? MATH 110 Sec 8-2: Interest Practice Exercises

4. If the simple interest on $3000 for 9 years is $1620, then what is the rate? MATH 110 Sec 8-2: Interest Practice Exercises

5. Use the future value formula for simple interest to find P if A=$2448, r=6%, t=6. MATH 110 Sec 8-2: Interest Practice Exercises

6. Use the future value formula for simple interest to find P if A=$2448, r=6%, t=6. MATH 110 Sec 8-2: Interest Practice Exercises

7. What is the value of an account at the end of 6 years if a principal of $13,000 is deposited in an account at an annual interest rate of 4% compounded monthly? (Round final answer to the nearest cent.) MATH 110 Sec 8-2: Interest Practice Exercises

8. What is the value of an account at the end of 6 years if a principal of $13,000 is deposited in an account at an annual interest rate of 4% compounded monthly? (Round final answer to the nearest cent.) MATH 110 Sec 8-2: Interest Practice Exercises

9. What is the value of an account at the end of 6 years if a principal of $13,000 is deposited in an account at an annual interest rate of 4% compounded monthly? (Round final answer to the nearest cent.) MATH 110 Sec 8-2: Interest Practice Exercises Also remember that: A = accumulated (future) value P = principal (present value) t = time (in years) r = annual interest rate (decimal)

10. A student has a government-backed loan for which payments are not due and interest does not accumulate until the student stops attending college. If the student borrowed $10,000 at an annual interest rate of 7.5%, how much interest is due 4 months after the student must begin payments? MATH 110 Sec 8-2: Interest Practice Exercises

11. A family is planning a vacation in 2 years. They want to get a certificate of deposit for $1500 to be cashed in for the trip. What is the minimum annual simple interest rate needed to have $2100 for the vacation? MATH 110 Sec 8-2: Interest Practice Exercises

12. A family is planning a vacation in 2 years. They want to get a certificate of deposit for $1500 to be cashed in for the trip. What is the minimum annual simple interest rate needed to have $2100 for the vacation? MATH 110 Sec 8-2: Interest Practice Exercises Solution I:

13. A family is planning a vacation in 2 years. They want to get a certificate of deposit for $1500 to be cashed in for the trip. What is the minimum annual simple interest rate needed to have $2100 for the vacation? MATH 110 Sec 8-2: Interest Practice Exercises Solution I:Solution II:

14. The Consumer Price Index (CPI) is an inflation measure and is equal to the percent of change in the CPI between 2 years. MATH 110 Sec 8-2: Interest Practice Exercises

15. The Consumer Price Index (CPI) is an inflation measure and is equal to the percent of change in the CPI between 2 years. MATH 110 Sec 8-2: Interest Practice Exercises a. What was the inflation rate from 1950 to 1990? (Round inflation rate percent to one decimal place.)

16. The Consumer Price Index (CPI) is an inflation measure and is equal to the percent of change in the CPI between 2 years. MATH 110 Sec 8-2: Interest Practice Exercises a. What was the inflation rate from 1950 to 1990? (Round inflation rate percent to one decimal place.)

17. MATH 110 Sec 8-2: Interest Practice Exercises b. If a pair of sneakers cost $38 in 1950, use the CPI to estimate the cost in 1990. (Use the unrounded value from part a but round the final answer to the nearest cent.) The Consumer Price Index (CPI) is an inflation measure and is equal to the percent of change in the CPI between 2 years.

18. MATH 110 Sec 8-2: Interest Practice Exercises b. If a pair of sneakers cost $38 in 1950, use the CPI to estimate the cost in 1990. (Use the unrounded value from part a but round the final answer to the nearest cent.) The Consumer Price Index (CPI) is an inflation measure and is equal to the percent of change in the CPI between 2 years.

19. MATH 110 Sec 8-2: Interest Practice Exercises b. If a pair of sneakers cost $38 in 1950, use the CPI to estimate the cost in 1990. (Use the unrounded value from part a but round the final answer to the nearest cent.) The Consumer Price Index (CPI) is an inflation measure and is equal to the percent of change in the CPI between 2 years. Note 2: The percent change in price from 1950 to 1990 is just the inflation rate from part a.

20. MATH 110 Sec 8-2: Interest Practice Exercises b. If a pair of sneakers cost $38 in 1950, use the CPI to estimate the cost in 1990. (Use the unrounded value from part a but round the final answer to the nearest cent.) The Consumer Price Index (CPI) is an inflation measure and is equal to the percent of change in the CPI between 2 years. Note 2: The percent change in price from 1950 to 1990 is just the inflation rate from part a.

21. Compute the monthly payment for a simple interest loan of $2660, with an annual interest rate of 8% and a term of 5 years. (Round answer to the nearest cent.) MATH 110 Sec 8-2: Interest Practice Exercises

22. Compute the monthly payment for a simple interest loan of $2660, with an annual interest rate of 8% and a term of 5 years. (Round answer to the nearest cent.) MATH 110 Sec 8-2: Interest Practice Exercises Strategy: Step 1: Find the future value A of the loan.

23. Compute the monthly payment for a simple interest loan of $2660, with an annual interest rate of 8% and a term of 5 years. (Round answer to the nearest cent.) MATH 110 Sec 8-2: Interest Practice Exercises Strategy: Step 1: Find the future value A of the loan. Step 2: Divide A by the total number of payments for the life of the loan

24. Compute the monthly payment for a simple interest loan of $2660, with an annual interest rate of 8% and a term of 5 years. (Round answer to the nearest cent.) MATH 110 Sec 8-2: Interest Practice Exercises Strategy: Step 1: Find the future value A of the loan.

25. Compute the monthly payment for a simple interest loan of $2660, with an annual interest rate of 8% and a term of 5 years. (Round answer to the nearest cent.) MATH 110 Sec 8-2: Interest Practice Exercises Strategy: Step 1: Find the future value A of the loan. A = $3724 Step 2: Divide A by the total number of payments for the life of the loan

26. Compute the monthly payment for a simple interest loan of $2660, with an annual interest rate of 8% and a term of 5 years. (Round answer to the nearest cent.) MATH 110 Sec 8-2: Interest Practice Exercises Strategy: Step 1: Find the future value A of the loan. A = $3724 Step 2: Divide A by the total number of payments for the life of the loan where # of payments = (12 / year)(5 years) = 60

27. A student graduates from college with $43,000 in student loans and a 6.5% annual simple interest rate. To reduce his debt as quickly as possible, beginning next month he is going to pay $700 per month toward the loan. After his first payment, how much will he still owe on the loan? (Round answer to nearest cent.) MATH 110 Sec 8-2: Interest Practice Exercises

28. A student graduates from college with $43,000 in student loans and a 6.5% annual simple interest rate. To reduce his debt as quickly as possible, beginning next month he is going to pay $700 per month toward the loan. After his first payment, how much will he still owe on the loan? (Round answer to nearest cent.) MATH 110 Sec 8-2: Interest Practice Exercises Strategy Step 1: Find amt of interest owed for 1 st month.

29. A student graduates from college with $43,000 in student loans and a 6.5% annual simple interest rate. To reduce his debt as quickly as possible, beginning next month he is going to pay $700 per month toward the loan. After his first payment, how much will he still owe on the loan? (Round answer to nearest cent.) MATH 110 Sec 8-2: Interest Practice Exercises Strategy Step 1: Find amt of interest owed for 1 st month. Step 2: Find total owed (Principal + Interest).

30. A student graduates from college with $43,000 in student loans and a 6.5% annual simple interest rate. To reduce his debt as quickly as possible, beginning next month he is going to pay $700 per month toward the loan. After his first payment, how much will he still owe on the loan? (Round answer to nearest cent.) MATH 110 Sec 8-2: Interest Practice Exercises Strategy Step 1: Find amt of interest owed for 1 st month. Step 2: Find total owed (Principal + Interest). Step 3: Subtract off the 1 st month’s actual payment.

31. A student graduates from college with $43,000 in student loans and a 6.5% annual simple interest rate. To reduce his debt as quickly as possible, beginning next month he is going to pay $700 per month toward the loan. After his first payment, how much will he still owe on the loan? (Round answer to nearest cent.) MATH 110 Sec 8-2: Interest Practice Exercises Strategy Step 1: Find amt of interest owed for 1 st month.

32. A student graduates from college with $43,000 in student loans and a 6.5% annual simple interest rate. To reduce his debt as quickly as possible, beginning next month he is going to pay $700 per month toward the loan. After his first payment, how much will he still owe on the loan? (Round answer to nearest cent.) MATH 110 Sec 8-2: Interest Practice Exercises Strategy Step 1: Find amt of interest owed for 1 st month.

33. A student graduates from college with $43,000 in student loans and a 6.5% annual simple interest rate. To reduce his debt as quickly as possible, beginning next month he is going to pay $700 per month toward the loan. After his first payment, how much will he still owe on the loan? (Round answer to nearest cent.) MATH 110 Sec 8-2: Interest Practice Exercises Strategy Step 1: Find amt of interest owed for 1 st month.

34. A student graduates from college with $43,000 in student loans and a 6.5% annual simple interest rate. To reduce his debt as quickly as possible, beginning next month he is going to pay $700 per month toward the loan. After his first payment, how much will he still owe on the loan? (Round answer to nearest cent.) MATH 110 Sec 8-2: Interest Practice Exercises Strategy Step 1: Find amt of interest owed for 1 st month. $232.92

35. A student graduates from college with $43,000 in student loans and a 6.5% annual simple interest rate. To reduce his debt as quickly as possible, beginning next month he is going to pay $700 per month toward the loan. After his first payment, how much will he still owe on the loan? (Round answer to nearest cent.) MATH 110 Sec 8-2: Interest Practice Exercises Strategy Step 1: Find amt of interest owed for 1 st month. $232.92 Step 2: Find total owed (Principal + Interest). TOTAL OWED = PRINCIPAL + INTEREST

36. A student graduates from college with $43,000 in student loans and a 6.5% annual simple interest rate. To reduce his debt as quickly as possible, beginning next month he is going to pay $700 per month toward the loan. After his first payment, how much will he still owe on the loan? (Round answer to nearest cent.) MATH 110 Sec 8-2: Interest Practice Exercises Strategy Step 1: Find amt of interest owed for 1 st month. $232.92 Step 2: Find total owed (Principal + Interest). $43232.92

37. A student graduates from college with $43,000 in student loans and a 6.5% annual simple interest rate. To reduce his debt as quickly as possible, beginning next month he is going to pay $700 per month toward the loan. After his first payment, how much will he still owe on the loan? (Round answer to nearest cent.) MATH 110 Sec 8-2: Interest Practice Exercises Strategy Step 1: Find amt of interest owed for 1 st month. $232.92 Step 2: Find total owed (Principal + Interest). $43232.92 Step 3: Subtract off the 1 st month’s actual payment ($700). $43232.92 - $700.00 = $42532.92