|Example 1: |
Greg invests $1200 at an annual rate of 6.5%. How long will it take until Greg earns $195 in interest?
I = PTR/100
195 = (1200 x T x 6.5) / 100
T = 2.4
Greg will earn $195 in interest in 2.5 years.
You invest $80 at a simple annual interest rate of 2%. How much simple interest would you earn in 1.5 years?
Nancy owes $38,000 in student loans. The interest rate on her loans is 8.25%. She will be paying these loans off for 20 years. How much will she pay altogether?
I = (p x r x t)/100
I = ($38,000 x 8.25 x 20)/100
I = $62,700
Adding the interest back on to the principle, Nancy has to pay $100,700.
Directions: Solve the following problems. Also write at least ten examples of your own.