1. Interest
(simple)
Money paid to borrow money
A fee for borrowing
Money earned for lending

2. Interest
I=prt
I = Interest
principal = starting money
rate = percent of interest per year
time = time in years

3. I=prt
Example:
Nat lends Issah $100. Nat charges Issah
10% interest. Issah forgets to pay Nat
back for a year! How much does Issah owe
Nat?
Solution
I = 100 * .1 * 1
I = $10
Issah owes Nat $110

4. I=prt
Example 2:
Kim borrows money from a payday loan
place. They charge 25% interest. Kim
borrows $300 for 60 days. How much does
she need to pay back?
Solution:
I = 300 * .25 * 60 ÷ 365
I = $12.33
Kim needs to pay $312.33 back.

5. I=prt
Example 3
Allen deposits $3000 into a bank account
that earns 4.5% interest. After how many
months will he have earned $500 in interest?
Solution
500 = 3000 * .045 * t
t = 500 ÷ (3000 * .045)
t = 3.7 years * 12 months
t = 44.44 months