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Over Lesson 7–6 A.A B.B C.C D.D 5-Minute Check 4 A.10.7% increase B.10.6% increase C.10.5% increase D.10.2% increase Myra bought a new car. Her monthly car payment went from $294 to $324. Find the percent of change.

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Splash Screen

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Then/Now You have worked with formulas before. Solve simple interest problems and apply the simple interest equation to real-world problems. Solve compound interest problems.

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Vocabulary interest simple interest principal compound interest The amount of money paid or earned for the use of money The amount of money paid or earned for the use of money on initial investment only (I = prt) The amount of money in an account at the time of calculating interest (generally thought of beginning cash)_ Interest paid on the initial principal and on interest earned in the past (money keeps rolling over into account earning more money each year)

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Example 1A Find Simple Interest A. Find the simple interest for $2000 invested at 2.5% for 3 years. I=prt Write the simple interest formula. I=2000 ● 0.025 ● 3 Replace p with 2000, r with 0.025, and t with 3. I= 150 Simplify. Answer: The simple interest is $150.

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Example 1B Find Simple Interest B. Find the simple interest for $4500 invested at 4.25% for 2 years. I=prtWrite the simple interest formula. I=4500 ● 0.0425 ● 2Replace p with 4500, r with 0.0425, and t with 2. I= 382.50Simplify. Answer: The simple interest is $382.50.

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A.A B.B C.C D.D Example 1A A.$105 B.$150 C.$210 D.$350 A. What is the simple interest for $3000 invested at 3.5% for 2 years?

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A.A B.B C.C D.D Example 1B A.$137.50 B.$275 C.$302.75 D.$412.50 B. What is the simple interest for $2500 invested at 2.75% for 4 years?

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Example 2 Find the Interest Rate SWIMMING POOL Mr. Webster borrowed $1280 to buy a new swimming pool. He will pay $57.60 each month for the next 24 months. Find the simple interest rate for his loan. UnderstandYou need to find the simple interest rate. PlanUse the formula I = prt. SolveFirst, find the amount of interest he will pay over 24 months. 24 ● $57.60 = $1382.40Multiply to find the total amount.

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Example 2 Find the Interest Rate $1382.40 – $1280 = $102.40Subtract to find the interest. The principal is $1280. So, p = 1280. The loan will be for 24 months or 2 years, so t = 2. I=prtWrite the simple interest formula. 102.40=1280 ● r ● 2Replace I with 102.40, p with 1280, and t with 2. 102.40= 2560rSimplify.

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Example 2 Find the Interest Rate Divide each side by 2560. Answer: The simple interest rate is 0.04 or 4%. 0.04=r CheckUse the formula I = prt. $1280 ● 0.04 ● 2 = $102.40

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A.A B.B C.C D.D Example 2 A.4.5% B.5% C.5.5% D.6% Mrs. Wymer borrowed $5100 to remodel her kitchen. She will pay $238 a month each month for the next 24 months. What is the simple interest rate for the loan?

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Example 3 Find the Total Amount What is the total amount of money in an account where $800 is invested at an interest rate of 6.25% compounded annually for 2 years? Step 1Find the amount of money in the account at the end of the first year. I=prtWrite the simple interest formula. I=800 ● 0.0625 ● 1Replace p with 800, r with 0.0625, and t with 1. I= 50Simplify.

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Example 3 Find the Total Amount 800 + 50 = 850Add the amount invested and the interest. At the end of the first year, there is $850 in the account. Step 2Find the amount of money in the account at the end of the second year. I=prtWrite the simple interest formula. I=850 ● 0.0625 ● 1Replace p with 850, r with 0.0625, and t with 1.

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Example 3 Find the Total Amount Answer: So, the amount in the account after 2 years is 850 + 53.13 or $903.13. I= 53.13Simplify.

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A.A B.B C.C D.D Example 3 A.$1035.00 B.$1070.00 C.$1071.23 D.$1092.41 What is the total amount of money in an account where $1000 is invested at an interest rate of 3.5% compounded annually for 2 years?

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End of the Lesson

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