Week 2  Lesson 2  Solving for P, r and t
By
Rob Sorensen
Created 2 years ago
Duration 0:11:21
55
Rearranging our basic simple interest formula to solve for principal, rate or time.

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Finance
Simple Interest

Slide 1  Simple Interest – Lesson 2Solving for P, r and t
 Rob Sorensen
 © Copyright 2015. All rights reserved.

Slide 2  More Simple Interest Formula
 We can rearrange our basic formula to solve for P, r or t as follows:
 Rob Sorensen
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Slide 3  Example – Finding the Principal
 How much would you have to deposit into a savings account paying 4% p.a. simple interest if you wanted to earn $20.00 over 6 months?
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Slide 4  Example – Finding the Rate
 If you borrow $1,000 for 4 months and the lender charges you $30 interest, what simple rate p.a. are they charging?
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Slide 5  Example – Finding the Time
 How long will it take a $5,000 investment to earn $100 interest at a rate of 9% p.a.?
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Slide 6  Rob Sorensen
 Try It Out!
 Joseph purchases an investment for $90,000. He sold it 30 days later for $91,000. What annual rate of return did he realize on his investment?
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Slide 7  Success Strategies
 Take your time reading questions.
 Write down everything that is given to you in the question as well as the unknown that you are trying to find.
 Make sure that you are working in consistent units – i.e. if the rate is annual, you must convert your time to years.
 Use all decimals during calculations – only round your final answer.
 Learn how to use the DATE functions on your calculator.
 Rob Sorensen
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