Question

name:
chapter 9
financial literacy assignment

1. in the following scenario, do not solve the simple interest problem, just simply state the interest, principal, rate and time. put a ? in the space of what is being solved for.

a) how much interest is earned if you invest $210 at 8% for 7 years
i = p = r = t =
b) how long must $2,300 be invested at 7.5% to earn $53
i = p = r = t =
c) if a loan is taken out for $1903 at 5.9% and costs $523, then how long was the loan for?
i = p = r = t =

1. a) solve the simple interest problem.

$7,400 invested at 10.5% for 3 years
b) find the total amount (principal plus interest) from 2a

Explanation:

1a)

Step1: Identify Interest (I)

We are to find interest, so \( I = ? \)

Step2: Identify Principal (P)

Principal is the investment amount, \( P = 210 \)

Step3: Identify Rate (r)

Rate is given as 8% or \( 0.08 \), so \( r = 0.08 \)

Step4: Identify Time (t)

Time is 7 years, so \( t = 7 \)

Step1: Identify Interest (I)

Interest earned is 53, so \( I = 53 \)

Step2: Identify Principal (P)

Principal is the investment amount, \( P = 2300 \)

Step3: Identify Rate (r)

Rate is 7.5% or \( 0.075 \), so \( r = 0.075 \)

Step4: Identify Time (t)

We are to find time, so \( t = ? \)

Step1: Identify Interest (I)

Interest (cost) is 523, so \( I = 523 \)

Step2: Identify Principal (P)

Principal is the loan amount, \( P = 1903 \)

Step3: Identify Rate (r)

Rate is 5.9% or \( 0.059 \), so \( r = 0.059 \)

Step4: Identify Time (t)

We are to find time, so \( t = ? \)

Answer:

\( I = ? \), \( P = 210 \), \( r = 0.08 \), \( t = 7 \)

1b)