Bell Ringer

1. Fahrenheit = 22°

2. Fahrenheit = 95°

3. Celsius = 10°

4. Celsius = 3°

C = 5/9 ( F – 32 )

Simple InterestSimple Interest

i = i = pprrtt

Principal = original amountPrincipal = original amount

Rate = annual rate of interestRate = annual rate of interest

Time = time in yearsTime = time in years

ExamplesExamples

i = i = pprrtt

1. Principal = $82, Rate = 11%, Time = 1 year1. Principal = $82, Rate = 11%, Time = 1 year

2. Principal = $2,322, Rate = 25%, Time = ½ year2. Principal = $2,322, Rate = 25%, Time = ½ year

3. Principal = $925, Rate = 8%, Time = ¼ year3. Principal = $925, Rate = 8%, Time = ¼ year

You try!You try!Suppose you borrow $500 for one year at Suppose you borrow $500 for one year at

12% simple interest. Find the interest 12% simple interest. Find the interest charged using the formula i = prt. charged using the formula i = prt.

Suppose you borrow $1,200 for half of a year Suppose you borrow $1,200 for half of a year at 22% simple interest. Find the interest at 22% simple interest. Find the interest charged using the formula i = prt.charged using the formula i = prt.

Suppose you borrow $185,000 for three Suppose you borrow $185,000 for three months at 6% simple interest. Find the months at 6% simple interest. Find the interest charged using the formula i = prt.interest charged using the formula i = prt.

Compound InterestCompound Interest

I = I = p p ( 1 + ( 1 + rr ))tt

Principal = original amountPrincipal = original amount

Rate = annual rate of interest as a decimal or Rate = annual rate of interest as a decimal or fractionfraction

Time = number of years over which the Time = number of years over which the principal earns interestprincipal earns interest

ExamplesExamples

I = I = p p ( 1 + ( 1 + rr ))tt

4. Principal = $5004. Principal = $500

Rate = 8% compounded yearlyRate = 8% compounded yearly Time = 12 years Time = 12 years

ExamplesExamples

I = I = p p ( 1 + ( 1 + rr ))tt

5. Principal = $7505. Principal = $750

Rate = 6.5% compounded annuallyRate = 6.5% compounded annually Time = 5 years Time = 5 years

ExamplesExamples

I = I = p p ( 1 + ( 1 + rr ))tt

6. Suppose you invest $1,000. How long will it 6. Suppose you invest $1,000. How long will it take to double your money at 6% simple take to double your money at 6% simple interest?interest?

You try 2!You try 2!

I = I = p p ( 1 + ( 1 + rr ))tt

1. Principal = $2,0001. Principal = $2,000

Rate = 6% compounded annuallyRate = 6% compounded annually Time = 3 years Time = 3 years

2. Principal = $1,6252. Principal = $1,625

Rate = 9.5% compounded annuallyRate = 9.5% compounded annually Time = 8 years Time = 8 years

HomeworkHomework

Interest WSInterest WS