SIMPLE INTEREST
L E S S O N P R O P E R
LEARN: TO COMPUTE
SIMPLE INTEREST
•Interest
•Simple Interest
•Principal or Maturity Value
•Rate of Interest
VOCABULARIES
When you borrow money from a bank, you pay
interest for the use of the bank’s money. When
you deposit money into a savings account, you are
paid interest. Simple interest is one type of fee
paid for the use of money.
I= Prt
Simple Interest
Principal is the amount of
money borrowed or invested
Rate of interest is the
percent charged or
earned
Time that the money
is borrowed or
invested (in years)
To buy a car, Jessica borrowed $15,000 for 3
years at an annual simple interest rate of 9%.
How much interest will she pay if she pays the
Additional Example 1: Finding Interest and Total
Payment on a Loan
