Answer:
Example 5.2.1: Simple Interest—Using a Table
Sue borrows $2000 at 5% annual simple interest from her bank. How much does
she owe after five years?
Table 5.2.1: Simple Interest Using a Table
Year Interest Earned Total Balance Owed
1 $2000*.05 = $100 $2000 + $100 = $2100
2 $2000*.05 = $100 $2100 + $100 = $2200
3 $2000*.05 = $100 $2200 + $100 = $2300
4 $2000*.05 = $100 $2300 + $100 = $2400
5 $2000*.05 = $100 $2400 + $100 = $2500
After 5 years, Sue owes $2500.
Example 5.2.2: Simple Interest—Using the Formula
Chad got a student loan for $10,000 at 8% annual simple interest. How much does
he owe after one year? How much interest will he pay for that one year?
P = $10,000, r = 0.08, t = 1
F = P(1 +rt)
F =+= 10000(1 0.08(1)) $10,800
Chad owes $10,800 after one year. He will pay $10800 - $10000 = $800 in
interest.
Example 5.2.3: Simple Interest—Finding Time
Ben wants to buy a used car. He has $3000 but wants $3500 to spend. He invests
his $3000 into an account earning 6% annual simple interest. How long will he
need to leave his money in the account to accumulate the $3500 he wants?
F = $3500, P = $3000, r = 0.06
3500 3000 1 0.06 = + ( t)
3500 1 0.06
3000
actually its a example
