EUCLID
·person (or institution) who invests the money or makes the funds available
LENDER OR CREDITOR
•amount of money borrowed or invested on the origin
date
PRINCIPAL
•amount after t years; that the lender receives from the borrower on the maturity date
MATURITY OR FUTURE VALUE
The simple interest formula is I=PRT.
What does the T represent?
TIME OR TERM
Alyssa borrowed 4,000 for 3 years at 8% simple interest rate. How much interest is that?
I = PRT
(4000)(.08)(3) = 960
·person (or institution) who owes the money or avails of the funds from the lender
BORROWER OR DEBTOR
•annual rate, usually in percent, charged by the lender, or rate of increase of the investment
RATE
FORMULA FOR SIMPLE INTEREST
Is = Prt
The simple interest formula is I=PRT.
What does the P represent?
PRINCIPAL
Joyce Anne borrowed 6,000 for 2 years at 3% simple interest rate. How much interest is that?
I = PRT
(6000)(.03)(2) = 360
·date on which money is received by the borrower
ORIGIN OR LOAN DATE
•amount paid or earned for the use of money
INTEREST
FORMULA FOR PRINCIPAL IN SIMPLE INTEREST
P = I/ RT
The simple interest formula is I=PRT.
What does the R represent?
RATE
Harvey borrowed 2,000 for 4 years at 8% simple interest rate. How much interest is that?
I = PRT
(2000)(.08)(4) = 640
·a date on which the money borrowed or loan is to be completely repaid
REPAYMENT OR MATURITY DATE
•interest that is computed on the principal and then added to it
SIMPLE INTEREST
FORMULA FOR RATE IN SIMPLE INTEREST
R = I/ PT
The simple interest formula is I=Prt.
The P represents the PRINCIPAL.
The PRINCIPAL means ___________________.
amount of money borrowed or invested on the origin
date
Jerry borrowed 4,000 for 5 years at 6% simple interest rate. How much interest is that?
I = PRT
(4000)(.06)(5) = 1,200
·amount of time in years the money is borrowed or invested; length of time between the origin and maturity dates
TIME OR TERM
•interest is computed on the principal and also
on the accumulated past interests
COMPOUND INTEREST
FORMULA FOR TIME IN SIMPLE INTEREST
T = I/PR
The simple interest formula is I=Prt.
The R represents the RATE.
The RATE means ___________________.
annual rate, usually in percent, charged by the lender, or rate of increase of the investment
The simple interest formula is I=Prt.
The T represents the TIME.
The TIME means ___________________.
amount of time in years the money is borrowed or invested; length of time between the origin and maturity dates