Download presentation

1
**7-8 simple and compound interest**

Objective: To solve simple interest problems To solve compound interest PROBLEMS Warm-Up Calculate 5% of 320 25% of 600 80% of 950

2
**7-8 simple and compound interest**

Objective: To solve simple interest problems To solve compound interest PROBLEMS Homework Answers 6 hrs. w = V / Lh s = P / 4 x > 2 p = qd a ≤ -3 s = ½r + 4 b > 24 m = n 6 weeks 75% a = 2m – b 31.3 $4900

3
**7-8 simple and compound interest**

Objective: To solve simple interest problems To solve compound interest PROBLEMS Vocabulary: principal – the initial amount of an investment or loan interest – the cost of borrowing interest rate – the percentage of the balance that an account earns over a period of time simple interest – interest paid only on the principal

4
**7-8 simple and compound interest**

Objective: To solve simple interest problems To solve compound interest PROBLEMS Simple Interest Formula: I = prt I: Interest p: principal r: interest rate per year t: time in years

5
**7-8 simple and compound interest**

Objective: To solve simple interest problems To solve compound interest PROBLEMS Example A Suppose you deposit $1000 in a savings account that earns 6% simple interest per year. Find the interest earned in two years. I = prt I = 1000 (.06) (2) I = 1000 (.06) (2) = $120 What is the total amount in the account after those two years? $ $120 = $1120 What is the amount of interest earned in 6 months? I = prt I = 1000 (.06) (0.5) I = 1000 (.06) (0.5) = $30

6
**7-8 simple and compound interest**

Objective: To solve simple interest problems To solve compound interest PROBLEMS Vocabulary: principal – the initial amount of an investment or loan interest – the cost of borrowing interest rate – the percentage of the balance that an account earns over a period of time simple interest – interest paid only on the principal compound interest – interest paid on both the principal and any interest earned in previous periods balance – the principal plus earned interest in previous periods

7
**7-8 simple and compound interest**

Objective: To solve simple interest problems To solve compound interest PROBLEMS Compound Interest Formula: B = p(1 + r)n B: Final Balance p: principal r: interest rate per each interest period n: number of interest periods

8
**7-8 simple and compound interest**

Objective: To solve simple interest problems To solve compound interest PROBLEMS Example B Suppose you deposit $400 in a savings account that earns 5% interest compounded annually. The balance of the account after 4 years is $ What is the balance of the account after another four years (total of 8 years)? B = p(1 + r)n B = 400( )8 B = 400( )8 ≈ 400(1.477) ≈ $590.98

9
**7-8 simple and compound interest**

Objective: To solve simple interest problems To solve compound interest PROBLEMS Example C Find the balance on a deposit of $2500 that earns 3% interest compounded semi-annually for 5 years? B = p(1 + r)n B = 2500( )10 B = 2500( )10 ≈ 2500(1.16) ≈ $

Similar presentations

© 2021 SlidePlayer.com Inc.

All rights reserved.

To make this website work, we log user data and share it with processors. To use this website, you must agree to our Privacy Policy, including cookie policy.

Ads by Google