![Page 1: Simple Interest pp. 205-207 5-4 SECTION. Click to edit Master text styles Second level Third level Fourth level Fifth level 2 SECTION Copyright © Glencoe/McGraw-Hill](https://reader035.vdocuments.us/reader035/viewer/2022062421/56649e405503460f94b31ebf/html5/thumbnails/1.jpg)
Simple Interest pp. 205-2075-4SECTIONSECTION
![Page 2: Simple Interest pp. 205-207 5-4 SECTION. Click to edit Master text styles Second level Third level Fourth level Fifth level 2 SECTION Copyright © Glencoe/McGraw-Hill](https://reader035.vdocuments.us/reader035/viewer/2022062421/56649e405503460f94b31ebf/html5/thumbnails/2.jpg)
• Click to edit Master text styles
• Second level
• Third level
• Fourth level
• Fifth level
2
SECTION
Copyright © Glencoe/McGraw-Hill
5-4
Section ObjectiveSection ObjectiveCalculate:
• simple interest
![Page 3: Simple Interest pp. 205-207 5-4 SECTION. Click to edit Master text styles Second level Third level Fourth level Fifth level 2 SECTION Copyright © Glencoe/McGraw-Hill](https://reader035.vdocuments.us/reader035/viewer/2022062421/56649e405503460f94b31ebf/html5/thumbnails/3.jpg)
• Click to edit Master text styles
• Second level
• Third level
• Fourth level
• Fifth level
3
SECTION
Copyright © Glencoe/McGraw-Hill
5-4
interest (p. 205)
The amount of money paid for the use of a lender’s money.
simple interest (p. 205)
Interest paid only on the principal in a bank account.
Key Words to KnowKey Words to Know
![Page 4: Simple Interest pp. 205-207 5-4 SECTION. Click to edit Master text styles Second level Third level Fourth level Fifth level 2 SECTION Copyright © Glencoe/McGraw-Hill](https://reader035.vdocuments.us/reader035/viewer/2022062421/56649e405503460f94b31ebf/html5/thumbnails/4.jpg)
• Click to edit Master text styles
• Second level
• Third level
• Fourth level
• Fifth level
4
SECTION
Copyright © Glencoe/McGraw-Hill
5-4
principal (p. 205)
The amount of money put into an account, on which interest is based.
annual interest rate (p. 205)
The percent of the principal in a bank account earned as interest based on one year.
Key Words to KnowKey Words to Know
![Page 5: Simple Interest pp. 205-207 5-4 SECTION. Click to edit Master text styles Second level Third level Fourth level Fifth level 2 SECTION Copyright © Glencoe/McGraw-Hill](https://reader035.vdocuments.us/reader035/viewer/2022062421/56649e405503460f94b31ebf/html5/thumbnails/5.jpg)
• Click to edit Master text styles
• Second level
• Third level
• Fourth level
• Fifth level
5
SECTION
Copyright © Glencoe/McGraw-Hill
5-4
Interest = Principal × Rate × Time
(Important Note: In this formula, rate is expressed as a decimal, fraction, or percent; time is expressed in years or a fraction of a year.)
FormulaFormula
![Page 6: Simple Interest pp. 205-207 5-4 SECTION. Click to edit Master text styles Second level Third level Fourth level Fifth level 2 SECTION Copyright © Glencoe/McGraw-Hill](https://reader035.vdocuments.us/reader035/viewer/2022062421/56649e405503460f94b31ebf/html5/thumbnails/6.jpg)
• Click to edit Master text styles
• Second level
• Third level
• Fourth level
• Fifth level
6
SECTION
Copyright © Glencoe/McGraw-Hill
5-4
Joyce Tyler deposits $900 in a savings account. The account pays an annual interest rate of 5½ percent. She makes no other deposits or withdrawals. After three months, the interest is calculated.
How much simple interest does her money earn?
Example 1Example 1
![Page 7: Simple Interest pp. 205-207 5-4 SECTION. Click to edit Master text styles Second level Third level Fourth level Fifth level 2 SECTION Copyright © Glencoe/McGraw-Hill](https://reader035.vdocuments.us/reader035/viewer/2022062421/56649e405503460f94b31ebf/html5/thumbnails/7.jpg)
• Click to edit Master text styles
• Second level
• Third level
• Fourth level
• Fifth level
7
SECTION
Copyright © Glencoe/McGraw-Hill
5-4
Step: Find the interest at 5½ percent.
Interest = Principal × Rate × Time
$900.00 × 5½% × 3/12
$900.00 × 0.055 × 0.25 = $12.375 = $12.38
Example 1 AnswerExample 1 Answer
![Page 8: Simple Interest pp. 205-207 5-4 SECTION. Click to edit Master text styles Second level Third level Fourth level Fifth level 2 SECTION Copyright © Glencoe/McGraw-Hill](https://reader035.vdocuments.us/reader035/viewer/2022062421/56649e405503460f94b31ebf/html5/thumbnails/8.jpg)
• Click to edit Master text styles
• Second level
• Third level
• Fourth level
• Fifth level
8
SECTION
Copyright © Glencoe/McGraw-Hill
5-4
Lena Green’s bank computes 4 percent interest on a daily basis. She has $1,000 in the account for 10 days. She makes a deposit of $600 and it is in the account for 15 days. She withdraws $400 and the balance earns interest for 6 days. How much interest does she earn? What is the amount in the account at the end of the month?
Example 2Example 2
![Page 9: Simple Interest pp. 205-207 5-4 SECTION. Click to edit Master text styles Second level Third level Fourth level Fifth level 2 SECTION Copyright © Glencoe/McGraw-Hill](https://reader035.vdocuments.us/reader035/viewer/2022062421/56649e405503460f94b31ebf/html5/thumbnails/9.jpg)
• Click to edit Master text styles
• Second level
• Third level
• Fourth level
• Fifth level
9
SECTION
Copyright © Glencoe/McGraw-Hill
5-4
Step: Find the interest at 4 percent for each set of days.
Principal × Rate × Time
(Note: Remember that the time has to be a fraction of a year, so divide the number of days by 365.)
Example 2 AnswerExample 2 Answer
![Page 10: Simple Interest pp. 205-207 5-4 SECTION. Click to edit Master text styles Second level Third level Fourth level Fifth level 2 SECTION Copyright © Glencoe/McGraw-Hill](https://reader035.vdocuments.us/reader035/viewer/2022062421/56649e405503460f94b31ebf/html5/thumbnails/10.jpg)
• Click to edit Master text styles
• Second level
• Third level
• Fourth level
• Fifth level
10
SECTION
Copyright © Glencoe/McGraw-Hill
5-4
$1,000 × 4% × 10/365 = $1.0958 = $1.10
($1,000 + $600) × 4% × 15/365 = $2.630 = $2.63
($1,600 – $400) × 4% × 6/365 = $0.789 = $0.79
Total interest for the month is $4.52
Total amount in the account is $1,200 + $4.52 = $1,204.52
Practice 2 Answer (cont.)Practice 2 Answer (cont.)
![Page 11: Simple Interest pp. 205-207 5-4 SECTION. Click to edit Master text styles Second level Third level Fourth level Fifth level 2 SECTION Copyright © Glencoe/McGraw-Hill](https://reader035.vdocuments.us/reader035/viewer/2022062421/56649e405503460f94b31ebf/html5/thumbnails/11.jpg)
• Click to edit Master text styles
• Second level
• Third level
• Fourth level
• Fifth level
11
SECTION
Copyright © Glencoe/McGraw-Hill
5-4
Victoria Wright deposited $1,500 in a savings account. No other deposits or withdrawals were made. The account paid an annual interest rate of 2 percent.
How much simple interest did her money earn after 6 months?
Practice 1Practice 1
![Page 12: Simple Interest pp. 205-207 5-4 SECTION. Click to edit Master text styles Second level Third level Fourth level Fifth level 2 SECTION Copyright © Glencoe/McGraw-Hill](https://reader035.vdocuments.us/reader035/viewer/2022062421/56649e405503460f94b31ebf/html5/thumbnails/12.jpg)
• Click to edit Master text styles
• Second level
• Third level
• Fourth level
• Fifth level
12
SECTION
Copyright © Glencoe/McGraw-Hill
5-4
$15.00
Practice 1 AnswerPractice 1 Answer
![Page 13: Simple Interest pp. 205-207 5-4 SECTION. Click to edit Master text styles Second level Third level Fourth level Fifth level 2 SECTION Copyright © Glencoe/McGraw-Hill](https://reader035.vdocuments.us/reader035/viewer/2022062421/56649e405503460f94b31ebf/html5/thumbnails/13.jpg)
• Click to edit Master text styles
• Second level
• Third level
• Fourth level
• Fifth level
13
SECTION
Copyright © Glencoe/McGraw-Hill
5-4
Rodolfo Ortega deposited $4,200 in a new savings account. The bank pays 5¼ percent simple interest computed on a daily basis. He made no other deposits or withdrawals.
How much simple interest will his money earn after 214 days?
Practice 2Practice 2
![Page 14: Simple Interest pp. 205-207 5-4 SECTION. Click to edit Master text styles Second level Third level Fourth level Fifth level 2 SECTION Copyright © Glencoe/McGraw-Hill](https://reader035.vdocuments.us/reader035/viewer/2022062421/56649e405503460f94b31ebf/html5/thumbnails/14.jpg)
• Click to edit Master text styles
• Second level
• Third level
• Fourth level
• Fifth level
14
SECTION
Copyright © Glencoe/McGraw-Hill
5-4
$129.28
Practice 2 AnswerPractice 2 Answer
![Page 15: Simple Interest pp. 205-207 5-4 SECTION. Click to edit Master text styles Second level Third level Fourth level Fifth level 2 SECTION Copyright © Glencoe/McGraw-Hill](https://reader035.vdocuments.us/reader035/viewer/2022062421/56649e405503460f94b31ebf/html5/thumbnails/15.jpg)
Simple Interest5-4END OF SECTIONEND OF SECTION