Financial Planning & Money Management Unit 1: Business Math Interest Interest The amount of money paid for

r the use of a lenders money methods for calculating interest 1! "imple interest

! #ompound interest

Simple Interest most common method Formula: I $ P % r % t

Interest $ Principal % rate % time &years' ()ample for calculating interest

Principal $ *+,-..

/ate $ 110

Time $ 1 months I $ +,-.. % 110 &!11' % 131 I $ *411!.. ()ample for calculating rate

#alculate Interest2

Principal $ *5,46.

Time $ 6 months

Interest $ *-.5!+. -.5!+. $ 5,46. % r % 631 / $ !1+ or 1+0 ()ample for calculating time

#alculate /ate2

Principal $ *4,+..

/ate $ 110

Interest $ *7-1! + 7-1! + $ 4,+.. % !11 % t T $ !-+ % 1 months T $ 5 months ()ample for calculating Principal

#alculate time2

/ate $ 160

Time $ - months

Interest $ * -.!6-.!6- $ P % !16 % -31

#alculate Principal2

P $ * 5.. On Your Own Calculate for the missing amount assuming there are 365 days in a year. In the space provided write the formula you used. Interest " #$".%& Principal ate "3' !ime "(& days

#"5.)6

#6)5.5&

"*'

#(%6."&

#%+$)&

6& days

#5+&6%

"5'

6& days

"imple Interest 8ord Pro9lems ()ample :oyce deposits *5,... in an account that pays an annual +!+0 interest rate! ;etermine the simple interest and the final amount in the account for &a' 7 years, &9' 7 months, &c' 7 days! a! 5,... % +!+0 % 7 $ *1,41+ < 5,... $ #"&+*$5 9! 5,... % +!+0 % 731 $ *1 7!-+ < 5,... $ #%+"(3.)5 c! 5,... % +!+0 % 7376+ $ *4!.- < 5,... $ #%+&&*.&)

On Your Own ". !yrell Otis deposited his I S refund chec, for #)6& at 5' and made no other deposits or withdrawals. -ow much simple interest did his money earn in 3 months. /hat is the final amount in the account.

(.

0aria 1orrowed #3+65& at "5' interest for "(& days. -ow much interest did she pay 1ased on a 36&2day year.

3. !om 1orrowed #(+&&& for 6& days 31ased on a 36&2day year4. -is interest amounted to #*3.33. /hat was the interest rate.

*. 5ohn 1orrowed money at "*' interest for 6& days 31ased on a 36&2day year4. -is interest for the loan amounted to #3%.(&. -ow much had he 1orrowed.