00:01
In this video, we're going to be looking at how to find simple interest.
00:05
On the left, we have a formula for simple interest, and it is i equals p times r times t.
00:12
P being your principal or the money borrowed or invested.
00:21
That's what you start with.
00:23
R is your annual rate of interest that we need to write as a decimal before we put it in our account.
00:30
And then t is a length of time that you borrow or invest.
00:33
So we're going to start with number one.
00:36
The first question, a bank is offering 3 .5 % simple interest on a savings account.
00:42
If $1 ,000 is invested, how much will be in the account in four years? so first, let's use our simple interest to calculate the amount of interest.
00:52
So i start with p, and we can shorthand this as just being p, r, t, or p times r times t.
01:00
Principles, $1 ,000.
01:02
That's how much was invested at the beginning.
01:05
Your rate is 3 .5 but i have to write this as a decimal so it's 0 .035.
01:12
I'm in the decimal to the left twice and that gives me 0 .035 and then times t which is four four years and they count for four years.
01:25
On my calculator i'm going to multiply 1000 times 0 .035 times 4 which is going to give me 140.
01:40
Now, 140 is not my answer.
01:43
140 is the amount of interest i equals 140 that was earned...