Vocabulary
The "t" in the simple interest equation.
What is the amount of time that you borrow the money?
Emilio's father borrows $1,200 from the bank for a riding lawn mower. the interest rate is 8% per year. how much simple interest will he pay if he if he takes 2 years to repay the loan?
What is $192 in interest in 2 years?
$1050 4.6% 2 years
What is $96.60 in 2 years
change 69% to a decimal
.69
A sound system has a regular price of $249. Find the total cost if it is on sale for 50% off and the sales tax is 5.75%.
What is $131.66
The amount paid or earned for the use of money.
Interest or Finance Charge
Raini has $750 in a savings account that pays 3% simple interest. How much interest will he earn in 9 months?
What is about $16.88 in interest?
$250, 2.85%, 3 years
What is $21.38 in 3 years?
Change 15% to a decimal
.15
A baseball cap at the mall costs $14.95. It is on sale for 30% off.
What is $10.47?
The amount of money that is originally financed, deposited or invested.
What is principal?
Cory charged a $600 TV on his credit card with an interest rate of 21%. If he has no other charges on the card, how much will he owe total after one month?
What is $610.08?
Remember you have to divide the time by 12...so 1 month divided by 12 = .08 for T. $600 x .08 x .21= $10.08
$500, 3.75% 1 year
What is $18.75 in 1 year?
Change 1% to a decimal
.01
To ensure that the products fit your financial needs...
Why is it a good idea to shop for a bank?
What is the rate of interest that the financial institution is charging you to borrow their money?
Marcus has $1,800 from his summer job to invest. Suppose he invests the $1,800 for 2 years and earns $144. What is the rate of interest?
What is 4%?
R= I/PxT
$144/$1800x2
$144/$3600 = .04 or 4%
$3,000, 5.5%, 2 years
What is $330 in 2 years
Change .45% to a decimal
.0045
Your savings earns 6% a year and compounds quarterly
Beginning balance is 100.00
Ending balance after 1 year is $106.14
The amount of money that you make each quarter
What is Q1=$1.50 Q2=$1.52 Q3=$1.55 Q4=$1.57
Remember annual rate of 6% has to be divided by 4 which equals .15
Interest that is accumulated on interest.
What is compound interest?
Fran has a regular personal savings account that earns 1.45% in simple interest a year. She has had $2,000 in the bank for 7 years. What is her balance?
I=PXRXT
I=$2,000 x .0145 x 7 = $203
Total balance = $2203
$9,000, .01%, 6 months
What is 45 cents interest earned in 6 months?
The average national savings interest rate paid is .01%. Change this to a decimal.
.0001
3 savings options offered by local and online banks
What are Regular Savings, CD (certificate of Deposit), Money Market Accounts?