1 / 8

CHAPTER FIVE SAVINGS ACCOUNTS

CHAPTER FIVE SAVINGS ACCOUNTS. LESSON FOUR SIMPLE INTEREST. Interest- The amount of money paid for the use of a lender’s money. Simple Interest- Interest paid only on the original principal. Principal- The amount of money earning interest.

stubblefield
Télécharger la présentation

CHAPTER FIVE SAVINGS ACCOUNTS

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. CHAPTER FIVESAVINGS ACCOUNTS LESSON FOUR SIMPLE INTEREST

  2. Interest- The amount of money paid for the use of a lender’s money. • Simple Interest- Interest paid only on the original principal. • Principal- The amount of money earning interest. • Annual Interest rate- The percent of the principal earned as interest in one year. • Time- REPRESENTED IN YEARS ONLY • 6 years = 6 • 6 months = 6/12 = 0.5 • 6 days = 6/365 = 0.01643836 • Interest = Principal x Rate x Time • I =prt • Amount = Principal + Interest • A = P + I

  3. Example 1: Joyce Tyler deposits $9,000 in an account that pays an annual 5.5% interest rate. Determine the simple interest and the amount in the account for (a) 3 years, (b) 3 months, and (c) 3 days. • (a) • I = 9,000 x 0.055 x 3 • I = $1,485 • A = 9,000 + 1,485 • A = $10,485 • (b) *Convert 3 months to years • I = 9,000 x 0.055 x .25 • I = $123.75 • A = $9,123.75 • (c) *Convert 3 days to years • I = 9,000 x 0.055 x 0.0082… • I = $4.07 • A = $9,004.07

  4. PAGE 223COMPLETE #1-2

  5. Example 2: Martin Ellis earned $150.00 in simple interest in 8 months at an annual interest rate of 6%. How much money did he invest? • I =prt • 150 = p x 0.06 x (8/12) • 150 = p x 0.04 • p = $3,750 (amount invested)

  6. PAGE 223COMPLETE #3-15

  7. Review #1 • George Flower deposits $2,500 in an account that pays an annual 3.75% interest rate. Determine the simple interest and the amount in the account for (a) 2years, (b) 2 months, and (c) 2 days.

  8. Review #2 • Sally Mae deposited $2,175.00 and earned $384.00 in simple interest in 2 years. What is her annual interest rate?

More Related