5.5 Simple InterestI can find simple interest.

Simple interest formula

Simple interest is a common application of percents.

I is interestP is the principal (what you started

with)r is the annual interest rate (per

year)t is time in years

ExampleIf you invest $50 at a simple

interest rate of 3.5% per year for 3 years, what is the amount of interest earned?

I = this is what we’re solving forP = 50r = 3.5% = 0.035t = 3I = $5.25

Graphing Simple Interest

Make a table

Graph the points

Comparing Loans

Find interest earned from each loan.

The 3 year loan costs more because it earns more interest.

Assignment

OddsP.200 #5-19