6-7 More Applications of Percents
Simple Interest
Course
Course 33
6-7 More Applications of Percents
Warm Up
1. What is 35 increased by 8%?
2. What is the percent of decrease from 144
to 120?
3. What is 1500 decreased by 75%?
4. What is the percent of increase from 0.32
to 0.64?
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6-7 More Applications of Percents
Problem of the Day
Maggie is running for class president. A
poll revealed that 40% of her classmates
have decided to vote for her, 32% have
decided to vote for her opponent, and 7
voters are undecided. If she needs 50%
of the vote to win, how many of the
undecided voters must vote for Maggie for
her to win the election?
Course 3
6-7 More Applications of Percents
Learn to compute simple interest.
Course 3
6-7 More Applications of Percents
Vocabulary
interest
simple interest
principal
rate of interest
Course 3
6-7 More Applications of Percents
When you borrow money from a bank, you pay
interest for the use of the bank’s money. When
you deposit money into a savings account, you are
paid interest. Simple interest is one type of fee
paid for the use of money.
Rate of interest is the
Simple Interest percent charged or
earned
I=P r t
Time that the money
Principal is the amount of is borrowed or
money borrowed or invested invested (in years)
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6-7 More Applications of Percents
Additional Example 1: Finding Interest and Total
Payment on a Loan
To buy a car, Jessica borrowed $15,000 for 3
years at an annual simple interest rate of 9%.
How much interest will she pay if she pays the
entire loan off at the end of the third year?
What is the total amount that she will repay?
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6-7 More Applications of Percents
Additional Example 1 Continued
Jessica will pay $4050 in interest.
You can find the total amount A to be repaid on a
loan by adding the principal P to the interest I.
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6-7 More Applications of Percents
Check It Out: Example 1
To buy a laptop computer, Elaine borrowed
$2,000 for 3 years at an annual simple
interest rate of 5%. How much interest will
she pay if she pays the entire loan off at the
end of the third year? What is the total
amount that she will repay?
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6-7 More Applications of Percents
Additional Example 2: Determining the Amount of
Investment Time
Nancy invested $6000 in a bond at a yearly
rate of 3%. She earned $450 in interest. How
long was the money invested?
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6-7 More Applications of Percents
Check It Out: Example 2
TJ invested $4000 in a bond at a yearly rate of
2%. He earned $200 in interest. How long was
the money invested?
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6-7 More Applications of Percents
Additional Example 3: Computing Total Savings
John’s parents deposited $1000 into a savings
account as a college fund when he was born.
How much will John have in this account after
18 years at a yearly simple interest rate of
3.25%?
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6-7 More Applications of Percents
Check It Out: Example 3
Bertha deposited $1000 into a retirement
account when she was 18. How much will
Bertha have in this account after 50 years at a
yearly simple interest rate of 7.5%?
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6-7 More Applications of Percents
Additional Example 4: Finding the Rate of Interest
Mr. Johnson borrowed $8000 for 4 years to
make home improvements. If he repaid a total
of $10,320, at what interest rate did he
borrow the money?
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6-7 More Applications of Percents
Check It Out: Example 4
Mr. Mogi borrowed $9000 for 10 years to
make home improvements. If he repaid a total
of $20,000 at what interest rate did he borrow
the money?
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6-7 More Applications of Percents
Lesson Quiz: Part I
1. A bank is offering 2.5% simple interest on a savings
account. If you deposit $5000, how much interest
will you earn in one year?
2. Joshua borrowed $1000 from his friend and paid
him back $1050 in six months. What simple annual
interest did Joshua pay his friend?
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6-7 More Applications of Percents
Lesson Quiz: Part II
3. The Hemmings borrowed $3000 for home
improvements. They repaid the loan and $600 in
simple interest four years later. What simple annual
interest rate did they pay?
4. Mr. Berry had $120,000 in a retirement account.
The account paid 4.25% simple interest. How much
money was in the account at the end of 10 years?
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