# Consumer Math

date post

01-Jan-2016Category

## Documents

view

85download

3

Embed Size (px)

description

Consumer Math. Chapter 2. Consumer Arithmetic. #10. Learning Unit Objectives. Simple Interest. Calculate simple interest Calculate the total amount of a loan and the total value of an investment at the end of a special term. #10. Learning Unit Objectives. - PowerPoint PPT Presentation

### Transcript of Consumer Math

Whole Numbers; How To Dissect And Solve Word ProblemsCalculate simple interest

Calculate the total amount of a loan and the total value of an investment at the end of a special term.

Simple Interest

Using the interest formula, calculate

the unknown when the other two (principal, rate, or time) are given

Simple Interest

10-*

The amount of the loan

(Face value)

Simple Interest Formula

Simple Interest (I) = Principal (P) x Rate (R) x Time (T)

Stated as a

Stated in years

Maha borrowed $30,000. The loan was for 6 months at a rate of 8%. What is interest and maturity value?

SI = $30,000 x.08 x 6 = $1,200

12

and Maturity Value

365

10-*

and Maturity Value

$40,000 x .08 x 124

365

$1,087.12

10-*

Formula - Principal

Principal = Interest

Interest (I) = Principal (P) x Rate (R) x Time (T)

Christina Jones paid the bank $19.48 interest at 9.5% for 90 days. How much did she borrow?

$19.48 .

.095 times 90 divided by 365. Do not round answer

10-*

= 10000 x 10 x 3

100

= $ 3000

= 10000+3000

=$ 13000

.

.I was getting 14.25% interest rate

What simple interest rate would allow $ 6000 to grow to an amount of $ 14550 in 10 years?

So the simple interest I= 14550 – 6000

=$ 8550

10-*

Formula - Rate

Rate = Interest

Interest (I) = Principal (P) x Rate (R) x Time (T)

Christina Jones borrowed $820.21 from the bank. Her interest is $19.48 for 90 days. What rate of interest did Christina pay?

$19.48 .

10-*

Formula - Time

Interest (I) = Principal (P) x Rate (R) x Time (T)

$19.48 .

T = $820.21 x .095 = .25

.25 x 365 = 91.25 days

Christina Jones borrowed $820.21 from the bank. Her interest is $19.48 for 9.5%. How much time does Christina have to repay the loan?

Convert years to days (assume 365 days)

10-*

Vocabulary:

Principal: an amount of money owed by an investor and held by a financial institution such as a bank.

Deposit: the act of establishing , or adding to , existing principal.

Balance: the amount of money in an account.

Interest: the amount of money you earn by leaving deposits in a bank or financial institution Interest is a percentage of your principal.

Term: the period of time an investment lasts.

10-*

Steps to answer simple interest question

Step 1. Read the problem carefully and list the information( look for the ‘key’ words)

Step 2. Find the interest

Step 3. To calculate the amount paid all together

Ahmad borrowed $ 78000 for 4 months at 12.75% pa simple interest to pay for her new house while her old one was being sold . How much interest did she pay? And how much was paid back altogether?

P = $78000

R = 12.75% or 0.1275 or 12.75

100

I= ?

= 78000 x 12.75% x 4/12

= $ 3315

= 78000+ 3315 =$81315

Calculate the total amount of a loan and the total value of an investment at the end of a special term.

Simple Interest

Using the interest formula, calculate

the unknown when the other two (principal, rate, or time) are given

Simple Interest

10-*

The amount of the loan

(Face value)

Simple Interest Formula

Simple Interest (I) = Principal (P) x Rate (R) x Time (T)

Stated as a

Stated in years

Maha borrowed $30,000. The loan was for 6 months at a rate of 8%. What is interest and maturity value?

SI = $30,000 x.08 x 6 = $1,200

12

and Maturity Value

365

10-*

and Maturity Value

$40,000 x .08 x 124

365

$1,087.12

10-*

Formula - Principal

Principal = Interest

Interest (I) = Principal (P) x Rate (R) x Time (T)

Christina Jones paid the bank $19.48 interest at 9.5% for 90 days. How much did she borrow?

$19.48 .

.095 times 90 divided by 365. Do not round answer

10-*

= 10000 x 10 x 3

100

= $ 3000

= 10000+3000

=$ 13000

.

.I was getting 14.25% interest rate

What simple interest rate would allow $ 6000 to grow to an amount of $ 14550 in 10 years?

So the simple interest I= 14550 – 6000

=$ 8550

10-*

Formula - Rate

Rate = Interest

Interest (I) = Principal (P) x Rate (R) x Time (T)

Christina Jones borrowed $820.21 from the bank. Her interest is $19.48 for 90 days. What rate of interest did Christina pay?

$19.48 .

10-*

Formula - Time

Interest (I) = Principal (P) x Rate (R) x Time (T)

$19.48 .

T = $820.21 x .095 = .25

.25 x 365 = 91.25 days

Christina Jones borrowed $820.21 from the bank. Her interest is $19.48 for 9.5%. How much time does Christina have to repay the loan?

Convert years to days (assume 365 days)

10-*

Vocabulary:

Principal: an amount of money owed by an investor and held by a financial institution such as a bank.

Deposit: the act of establishing , or adding to , existing principal.

Balance: the amount of money in an account.

Interest: the amount of money you earn by leaving deposits in a bank or financial institution Interest is a percentage of your principal.

Term: the period of time an investment lasts.

10-*

Steps to answer simple interest question

Step 1. Read the problem carefully and list the information( look for the ‘key’ words)

Step 2. Find the interest

Step 3. To calculate the amount paid all together

Ahmad borrowed $ 78000 for 4 months at 12.75% pa simple interest to pay for her new house while her old one was being sold . How much interest did she pay? And how much was paid back altogether?

P = $78000

R = 12.75% or 0.1275 or 12.75

100

I= ?

= 78000 x 12.75% x 4/12

= $ 3315

= 78000+ 3315 =$81315