8.1 Simple Interest WHAT IS IT?

Simple Interest

The total AMOUNT: the total value of an investment or a loan

I = Prt

A = P + I

A = P + Prt

A = P ( 1 + rt )

A: amount

I : interest

P : principal

r : interest rate, expressed as a decimal

t : the same period as the interest rate, usually per year FORMULAS TERMS

PRINCIPAL: a sum of money that is borrowed or invested

INTEREST: money you earn from an investment

OR

the cost of borrowing money LEARNING TOOLS How much money does Iris owe us? WHY DO WE NEED TO KNOW SIMPLE INTEREST? Simple interest is something that, if not already, could affect our lives in the future.

But why? When we deposit money into a savings account at a bank, interest can be collected at a certain rate, depending on the situation, company, bank, etc. EXAMPLE:

Carmen deposits $3000 into a savings account. The rate of simple interest is 6%/a.

How much money does Carmen gain in her account each year from interest? I = Prt

I = (3000)(0.06)(1)

I = $180 The interest is $180 per year.

This means that Carmen gains $180 each year on simple interest based upon her initial deposit into her savings account. Total Amount: INTEREST + PRINCIPAL: SIMPLE INTEREST: interest earned or paid only on the original sum of money that was invested or borrowed

### Present Remotely

Send the link below via email or IM

CopyPresent to your audience

Start remote presentation- Invited audience members
**will follow you**as you navigate and present - People invited to a presentation
**do not need a Prezi account** - This link expires
**10 minutes**after you close the presentation - A maximum of
**30 users**can follow your presentation - Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.

### Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.

You can change this under Settings & Account at any time.

# Simple Interest

No description