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6.1. SIMPLE INTEREST Words to know: Simple Interest(I)- the amount paid or earned for the use of money. Principal (P) - the amount of money borrowed or invested. Time (t) the number of years for which the money is invested or borrowed.
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6.1. SIMPLE INTEREST Words to know: Maturity Value/Future Value/Final Amount (F) sum of the principal and interest. It is also the amount of an investment after t years or the amount at the end of the term.
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To find simple interest we use the following formula: I = Prt Interest Principal Interest rate written as a decimal time (in years) 6.1.1. SIMPLE INTEREST FORMULA
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FORMULA FOR THE AMOUNT Amount(F) = Principal (P) + Interest (I) F = P + I since I = Prt F = P + Prt F = P( 1 + rt)
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6.1.2. FINDING THE SIMPLE INTEREST AND AMOUNT 1. If 4, 000 borrowed at an annual interest rate of 16% has to be repaid in 3 years, find the interest and the amount due. Copyright by Island Publishing House, Inc.
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2. Suppose you have 10,000 deposited in bank that gives 10% simple interest. How much is the interest you will receive if you hold your deposit for nine months?
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