1. Write the decimal as a percent. 1. 0.06 2. 0.125 Lesson 7.7 , For use with pages 375-380

2. Write the decimal as a percent. 1. 0.06 2. 0.125 Lesson 7.7 , For use with pages 375-380 ANSWER 6% ANSWER 12.5%

3. Simple Interest

4. Essential Questions

• What are different situations percents are used in real life?

• As a consumer, why is it important for you to know about percents?

• How important is it to be able to understand the relationship between fractions and percents? Why?

5.

• Today we are going to discuss interest in relationship to money. Do any of you know what interest is?

• Do any of you have a savings account?

6.

• Interest:

• • The amount of money paid for the use of money

• • This can be both a good thing and a bad thing. Why? Can you explain the difference?

7. Simple Interest

• To calculate interest you must know three more words:

• Principal = the amount of money invested or borrowed

• Rate = the interest rate the percent - like 7 % (must change to a decimal before multiplying)

• Time = the length of the investment or loan (in years or months depending on the rate)

8.

• To calculate simple interest we use a formula that looks like this I = PRT Interest = principal x rate x time

• The one thing to remember is that you cant multiply by a percent. It must be changed to a decimal (or fraction) before you multiply.

9.

• The other thing you must watch for is that the rate (annual or monthly) must MATCH the time (annual or monthly)

• In other words, if the rate is given in years, the time must be in years.

• If the rate is given in months, the time must be given in months.

10.

• Suppose you want to buy your first used car. You are working and know you can make payments. Should you save more or just go get a loan?

• Lets see: the bank will loan you up to $7000 at the rate of 9% annual interest for a period of 4 years. How much interest will you pay in 4 years? What is the real cost of the car after 4 years?????

11.

• I = PRT

• I = (7000)(0.09)(4)

• I = $2520 interest that you paid on this car.

• So the car really cost you $7000 + 2520 for a total of $9520.

• Is the car worth that after 4 years of payments?

12. EXAMPLE 3 Finding Simple Interest I = Prt Write formula for simple interest. = (500)(0.025)(1.5) Substitute values. 18 months = 1.5 years. =18.75 Multiply. You deposit $500 in a savings account that pays a simple interest rate of 2.5% per year. How much interest will you earn after 18 months? Savings You will earn $18.75 in interest. ANSWER

13. EXAMPLE 1 GUIDED PRACTICE for Examples 2 and 3 I = Prt Write formula for simple interest. = (500)(0.035)(2) Substitute values. 24 months = 2 years. =35 Multiply. You deposit $500 in a savings account that pays a simple interest rate at 3.5% per year. How much interest will you earn after 24 months? You will earn $35 in interest. ANSWER

14.

• Loan: $10,000

• Rate: 8 % annually Time: 9 months

• Find the interest

• Find the total amount paid for the loan.

15.

• Classzone.com animation

• Go to Chapter 7 Simple interest

16.

• Assignment: Worksheet over simple interest