Page 804 - Algebra 1

b. $12,500 is invested for 15 years at 4% simple interest. How much money will be in the account after 15 years?
SOLUTION
Use the simple interest formula.
The principal P is 12,500. The rate r is 4%, or 0.04. The time t is 15.
I = Prt
= 12,500(0.04)(15) = 7500
Write the formula, then evaluate. Substitute the values of the variables. Simplify.
The account will earn $7500 interest in 15 years.
Add this interest to the original amount invested to find the total amount in the account.
12,500 + 7500 = 20,000
There will be $20,000 in the account after 15 years.
c. $6000 is borrowed at 8.5% simple interest. The total amount of interest paid is $2040. For how many years was the money borrowed?
SOLUTION
Use the simple interest formula and solve for t.
The principal P is 6000. The interest I is 2040. The rate r is 8.5% or 0.085.
I = Prt
2040 = 6000(0.085)t 2040 = 510t
Write the formula.
Substitute the values of the variables. Simplify.
Divide both sides by 510.
4 = t
The money was borrowed for 4 years.
d. After 18 months, $738 had been earned on an $8200 investment. What was the interest rate?
SOLUTION
Use the simple interest formula and solve for r.
The principal P is 8200. The interest I is 738. The time t is _18 = 1.5 years.
Hint
The time in the simple interest formula must be in years. There are 12 months in 1 year. To change the units from months to years, divide by 12.
I = Prt
738 = 8200 · r · 1.5 738 = 12,300r
12
Write the formula.
Substitute the values of the variables. Simplify.
Divide both sides by 12,300.
0.06 = r
Convert 0.06 to a percent. The interest rate was 6%.
Lesson 116 789