Lesson 7.8

Simple and Compound Interest J8

Simple Interest ,[object Object],[object Object],[object Object],[object Object]

Ex. 1 Simple Interest Formula ,[object Object],[object Object],[object Object],[object Object],[object Object]

Real-World ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

b. Now Figure Interest In Months ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Now you try! Find the Simple Interest ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Reminder: Time is always in terms of Years. So, if you’re dealing with months, you have to make your months a fraction of a year. $30 $4.38 I = PRT

Ex. 2 Compound Interest ,[object Object],[object Object],[object Object]

Fill In This Chart $486.20 Year 4: Year 3: 420.00 Year 2: 400 + 20 = 420.00 400.00 · 0.05 = 20.00 Year 1: $400.00 Balance at End of Each Year Interest (I = PRT) Principle @ Beginning of Year

Compound Interest Formula ,[object Object],[object Object],[object Object]

Compound Interest Formula ,[object Object],[object Object],[object Object],[object Object],[object Object]

Ex. 3 Semi-Annual ,[object Object],6% annual interest rate ÷ 2 interest periods = 3% semiannual interest rate payment periods = number of years x number of interest periods per year.

[object Object],[object Object],[object Object]

The Formula! ,[object Object],[object Object],[object Object],[object Object],[object Object]

Now you try! ,[object Object],[object Object],[object Object],$955.09 $955.37

Lesson 7.8

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Lesson 7.8