Simple Interest
Formula
I = PRT
I = PRT
• I = interest earned (amount of money the bank pays
you)
• P = Principle amount invested or borrowed.
• R = Interest Rate usually given as a percent
(must changed to decimal before plugging it into formula)
• T = Time ( in years)
EX1) A principle of $7,600 is invested at 3.5%, what is the total
simple interest accumulated after 4 years.
• I = PRT
• I= 7,600 X .035 X 4
• I=$1,064
• Interest paid by bank is
unknown
• Principle (invested)
• Rate changed to decimal
• Time is 4 years
• Multiply
EX 2) An investment of $7,000
is invested at 7.5%, what
is the total simple interest
accumulated in the
checking account after 3
years.
I = PRT
I= 7,000 X .075 X 3
I= $1575
EX 3) When invested at an annual
interest rate of 6% an account
earned $360.00 of simple
interest in 2 years. How much
money was originally invested
in account?
I = PRT
360 = P X .06 X 2
360 = 0.12 X P
360 ÷ 0 .06
3,000 = P
Essential Question
Explain the variables in the formula for simple
interest?
Assignment
Page 287-288
Problems 1-8,10
Simple Interest
Formula
I = PRT
I = PRT
• I = __________________(amount of money the bank
pays you)
• P = _________ amount invested or borrowed.
• R = Interest _____ usually given as a percent
(must changed to decimal before plugging it into formula)
• T = _____ ( in years)
EX1) A principle of $5,000 is invested at 4.5%, what is the total
simple interest accumulated after 2 years.
• I = PRT
• I=
• I=
•
•
•
•
•
I
P
R
T
M
EX 2) An investment of $7,000
is invested at 7.5%, what
is the total simple interest
accumulated in the
checking account after 3
years.
EX 3) When invested at an annual
interest rate of 6% an account
earned $360.00 of simple
interest in 2 years. How much
money was originally invested
in account?
Essential Question
Explain the variables in the formula for simple
interest?