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1 Press Ctrl-A ©G Dear2010 – Not to be sold/Free to use Simple Interest Stage 6 - Year 11 Applied Mathematic (Preliminary General 1)

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2 When do we use simple interest? Government Investment Bonds and Private Company Debentures and Comparing Investments and Loans and Term Deposits

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3 The Formula I = P r nI = P r n I = Simple Interest P = Principal (Money) r = Rate of Interest as a decimal. n = Number of Interest Periods.

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4 Example I = P r nI = P r n John invests $50,000 for 5 years at 6% p.a. in Government Bonds I = 50000 x0.06 x 5 [6% = 6÷ 100 = 0.06] = $15,000

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5 Table for $1 I = P r nI = P r n 12345678910 5% 0.050.100.150.200.250.300.350.400.450.50 6% 0.060.120.180.240.300.360.420.480.640.60 7% 0.070.140.210.280.350.420.490.560.630.70 8% 0.080.160.240.320.400.480.560.640.720.80 Periods Interest I = 5000 x0.63 = $3,150 $5000 @ 7% 9 years

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6 Table for $1 I = P r nI = P r n 12345678910 5% 0.050.100.150.200.250.300.350.400.450.50 6% 0.060.120.180.240.300.360.420.480.640.60 7% 0.070.140.210.280.350.420.490.560.630.70 8% 0.080.160.240.320.400.480.560.640.720.80 Periods Interest I = 250 x0.35 = $75.50 $250 @ 5%pa 7 years

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7 Graphs for $1I = P r nI = P r n 12345678910 5% 0.050.100.150.200.250.300.350.400.450.50 6% 0.060.120.180.240.300.360.420.480.640.60 7% 0.070.140.210.280.350.420.490.560.630.70 8% 0.080.160.240.320.400.480.560.640.720.80PeriodsInterest 12345678910 Periods 0.5 1.0 5% 6% 7% 8%

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