1. Section 1

1.7. Explore 2

Mathematics 20-3 Module 2

Section 1: Simple and Compound Interest

 

Jolene Danchuk is the person in this photo. She has invested in a GIC.

Amos Morgan/Photodisc/Thinkstock

Self-Check 1
  1. Jolene Danchuk has just invested $1000 in a 90-day GIC at her bank. The GIC earns simple interest at 3% per annum. How much will Jolene’s investment be worth after 90 days? Answer

textbook
  1. Do question 1 from “Build Your Skills” on page 272 of MathWorks 11. Answer
  1. Do question 3 from “Build Your Skills” on page 273 of MathWorks 11. Answer


This is a play button that opens Accordian.

In Example you will see that you can find any of the variables in the simple interest formula as long as only one variable is missing.

 

In the example about Morris, you found the interest rate using the formula when you knew the interest earned, the principal, and the loan’s term.

 

In the formula I = Prt, you knew I, P, and t, and you had to find r.

 

Anytime you are given three of the four values in the formula, you can determine the fourth.

 

In the example, you substituted directly into the formula I = Prt. You could rearrange the formula first if you prefer. If you want to determine r, you can rearrange the formula as follows.

 

 

 

In Self-Check 2, try rearranging the formula before substituting into the simple interest formula.