Lesson 10

Simple Interest
Warm-Up
Convert to decimal?

1
2

Recall
Convert to decimal?

1
3

Recall
Convert to decimal?

2
3

Recall
Convert to decimal?

1
4

Recall
Convert to decimal?

3
4

Recall
Convert to percentage?

50
100

Recall
Convert to percentage?

1
100

Recall
Convert to fraction?

0.25

Recall
Convert to fraction?

0.5

Recall
Convert to fraction?

0.75

Recall
Convert to fraction?

Recall
Convert to percentage?

0.25

Recall
Convert to percentage?

0.5

Recall
Convert to percentage?

0.75

Recall
Convert to percentage?

Recall
What is the answer?

10% of $100

Apply
What is the answer?

10% of $50

Apply
What is the answer?

30% of $50

Apply
What is the answer?

30% of $200

Apply
What is the answer?

60% of $300

Apply
What is the answer?

90% of $900

Apply
Convert to percentage?

a mark of
3/10

Apply
Convert to percentage?

a mark of
8/10

Apply
Convert to percentage?

a score of
10/15

Apply
Convert to percentage?

Running
500m out
of 1km

Apply
Convert to percentage?

Running
900m out
of 1km

Apply
Percentage Increase or Decrease?

+45%

Apply
Percentage Increase or Decrease?

-99%

Apply
Percentage Increase or Decrease?

$67 to $99

Apply
Percentage Increase or Decrease?

$1 to 88c

Apply
Percentage Increase or Decrease?

3km to 900m

Apply
 Discounts

Sale price of a $50 shirt

after a 20% discount

Apply
 Discounts

Original price of a $95 shirt that

has already had a 5% discount

Apply
 Profit & Loss

The cost price is the price something is bought for

The selling price is the price something is sold for

A ? is made when selling price < cost price

A profit is made when selling price > cost price

Recall
 Profit & Loss

The cost price is the price something is bought for

The selling price is the price something is sold for

A loss is made when selling price < cost price

A ? is made when selling price > cost price

Recall
 Mark Ups

x (100% + mark up)

? Selling Price (SP)

(100% + mark up)

Recall
 Mark Ups

x (100% ? )

Cost Price (CP) Selling Price (SP)

(100% + mark up)

Recall
 Mark Ups

x (100% + mark up)

Cost Price (CP) Selling Price (SP)

? (100% + mark up)

Recall
 Types of Income

Wages: hourly rate of pay. Extra work paid as overtime at a

penalty rate. e.g retail or trades

Salary: weekly, monthly or annual rate of pay. Overtime not

usually paid; time off can be given instead. e.g.

teachers or lawyers

Commission: retainer or flat fee plus percentage of sales or

certain amount for every sale. e.g real estate agent

or car salesperson

Piece work: paid per item produced e.g fruit picker or shearer

Recite
 Types of Income

hourly rate of pay. Extra work paid as overtime at a

? penalty rate. e.g retail or trades

weekly, monthly or annual rate of pay. Overtime not

? usually paid; time off can be given instead. e.g.

teachers or lawyers

? retainer or flat fee plus percentage of sales or

certain amount for every sale. e.g real estate agent

or car salesperson

? paid per item produced e.g fruit picker or shearer

Recall
 Income - Piece Work

Emma is employed sewing dresses. She is paid at the rate of $9.50 per dress
and she can complete 42 dresses each week. Calculate her weekly income.

Total Income = ? x 42

= $399

Apply
 Income - Wages
Sim is employed at a photographic studio. Sims job is covered by an award that
states that he must be paid a standard hourly rate of $15.80 for a standard 38-
hour Monday to Friday week. On Saturday he is paid time-and-a-half (1.5 times the
standard hourly rate) for the first 3 hours and double time (twice the standard
rate) for any additional hours thereafter. One particular week, Sim worked 4.5 hours
on Saturday in addition to his standard hours. How much money did he earn?

Standard = 38 x 15.80 = $600.40

? = 3 x 15.80 x 1.5 = $71.10

Double Time = 1.5 x 15.80 x 2 = $47.40

Total = $718.90
Apply
 Income - Commission
Lina works as a real estate agent. She receives a retainer of $450 a fortnight,
plus a commission of 2.3% of the value of the property she sells. How much does
Lina earn in a fortnight in which she sells a house for $340 000?

Commission = ? of 340,000

= 0.023 x 340,000

= $7820

Total Income = $7820 + $450

= $8270

Apply
 Income Tax

We can see from the table that no tax is paid if the annual
income is $18,200 or less. This is known as the tax-free threshold.

Before tax, your income is referred to as gross income.

The amount remaining after tax and other deductions are paid is
known as net income (sometimes called take home pay).

Recite
 Income Tax

We can see from the table that no tax is paid if the annual
income is $18,200 or less. This is known as the ? .

Before tax, your income is referred to as ? .

The amount remaining after tax and other deductions are paid is
known as ? (sometimes called take home pay).

Recall
 Calculating Tax

Salary $68,000 Calculate the annual net income and annual tax payable

Step 5 Subtract total tax from gross income to receive net

income

$10,075 + $3,572 $68,000 - ?

= $13,647 annual tax payable = $54,353 annual net income

Apply
What?
 Lesson Intention

To calculate simple interest on a loan

amount
 Success Criteria

Demonstrated ability to calculate simple

interest on a loan amount

I-Do
 What is Interest?

Whenever money is borrowed, the borrower pays the lender for the use
of that money. This payment is known as interest. Interest is paid on
top of the repayment of the amount borrowed (called the principal). It is
charged as a percentage ratea percentage of the amount borrowed,
calculated at regular time periods.

Whenever money is invested (deposited into an account) with a bank, the

bank pays the investor interest because it uses the investors money to
conduct business.
 Simple Interest

Simple interest is calculated on the initial amount borrowed or invested,

regardless of how that amount changes over the time period of the loan
or investment.

Formula

I = PRT
I = interest ($)
P = principal (loan amount, $)
R = rate (per annum (p.a.), decimal)

T = time (years)
 Simple Interest Formula

I = PRT
How to do it..

Calculate simple interest on a loan of $5000 at 16.4% p.a. interest

over 4 years.

Step 1 Step 2 Step 3

Find the variables Substitute into

Answer
of the formula formula

I = PRT
I = 5000 x 0.164 x 4 I = $3280
P = $5000

R = 16.4% 100

= 0.164

T = 4
How to do it..

Barbara borrows $24 000 to set up a business. She repaid it over 5 years and
3 months, after paying 18.5% p.a. in simple interest, payable quarterly.

. (a) How much interest did she pay quarterly? Formula

. (b) What was the total amount of money repaid?
I = PRT
Step 1 Step 2 Step 3

Find the variables Substitute into Answer

of the formula formula (a)

How many lots of 3

I = PRT I =
months in 5 years and

P = $24000 24000 x 0.185 x 5.25 3 months?

= 4x5+1 = 21
R = 18.5% 100
I = $23,310 = $23,310 21
= 0.185
I = $1,110 per
T = 5y3m = 5.25
quarter
How to do it..

Barbara borrows $24 000 to set up a business. She repaid it over 5 years and
3 months, after paying 18.5% p.a. in simple interest, payable quarterly.

. (a) How much interest did she pay quarterly? Formula

. (b) What was the total amount of money repaid?
I = PRT
Step 1 Step 2 Step 3

Find the variables Substitute into Answer

of the formula formula (b)

I = PRT I = P + I
P = $24000 24000 x 0.185 x 5.25
= $24000
R = 18.5% 100
I = $23,310 + $23,310
= 0.185
Total = $47,310
T = 5y3m = 5.25
We-Do
 Simple Interest

Shout out the missing word/number

Are you ready? Lets Go!

 Simple Interest

Simple interest is calculated on the initial amount borrowed or invested,

regardless of how that amount changes over the time period of the loan
or investment.

Formula

I = PRT
I = ? ($)
P = principal (loan amount, $)
R = rate (per annum (p.a.), decimal)

T = time (years)
 Simple Interest

Simple interest is calculated on the initial amount borrowed or invested,

regardless of how that amount changes over the time period of the loan
or investment.

Formula

I = PRT
I = interest ($)
P = ? (loan amount, $)
R = rate (per annum (p.a.), decimal)

T = time (years)
 Simple Interest

Simple interest is calculated on the initial amount borrowed or invested,

regardless of how that amount changes over the time period of the loan
or investment.

Formula

I = PRT
I = interest ($)
P = principal (loan amount, $)
R = ? (per annum (p.a.), decimal)

T = time (years)
 Simple Interest

Simple interest is calculated on the initial amount borrowed or invested,

regardless of how that amount changes over the time period of the loan
or investment.

Formula

I = PRT
I = interest ($)
P = principal (loan amount, $)
R = rate (per annum (p.a.), decimal)

T = ? (years)
 Simple Interest Formula

I = PRT
How to do it..

Calculate simple interest on a loan of $5000 at 16.4% p.a. interest

over 4 years.

Step 1 Step 2 Step 3

Find the variables Substitute into

Answer
of the formula formula

I = PRT
I = 5000 x 0.164 x 4 I = $3280
P = ?
R = 16.4% 100

= 0.164

T = 4
 Simple Interest Formula

I = PRT
How to do it..

Calculate simple interest on a loan of $5000 at 16.4% p.a. interest

over 4 years.

Step 1 Step 2 Step 3

Find the variables Substitute into

Answer
of the formula formula

I = PRT
I = 5000 x 0.164 x 4 I = $3280
P = $5000

R = 16.4% 100

= 0.164

T = ?
 Simple Interest Formula

I = PRT
How to do it..

Calculate simple interest on a loan of $5000 at 16.4% p.a. interest

over 4 years.

Step 1 Step 2 Step 3

Find the variables Substitute into

Answer
of the formula formula

I = PRT
I = 5000 x ? x 4 I = $3280
P = $5000

R = 16.4% 100

= 0.164

T = 4
How to do it..

Barbara borrows $24 000 to set up a business. She repaid it over 5 years and
3 months, after paying 18.5% p.a. in simple interest, payable quarterly.

. (a) How much interest did she pay quarterly? Formula

. (b) What was the total amount of money repaid?
I = PRT
Step 1 Step 2 Step 3

Find the variables Substitute into Answer

of the formula formula (a)

How many lots of 3

I = PRT I =
months in 5 years and

P = $24000 24000 x 0.185 x 5.25 3 months?

= 4x5+1 = 21
R = 18.5% 100
I = $23,310 = $23,310 21
= 0.185
I = $1,110 per
T = 5y3m = ?
quarter
How to do it..

Barbara borrows $24 000 to set up a business. She repaid it over 5 years and
3 months, after paying 18.5% p.a. in simple interest, payable quarterly.

. (a) How much interest did she pay quarterly? Formula

. (b) What was the total amount of money repaid?
I = PRT
Step 1 Step 2 Step 3

Find the variables Substitute into Answer

of the formula formula (a)

How many lots of 3

I = PRT I =
months in 5 years and

P = $24000 24000 x 0.185 x 5.25 3 months?

R = 18.5% 100 = 4x5+1 = ?

I = $23,310 = $23,310 21
= 0.185
I = $1,110 per
T = 5y3m = 5.25
quarter
How to do it..

Barbara borrows $24 000 to set up a business. She repaid it over 5 years and
3 months, after paying 18.5% p.a. in simple interest, payable quarterly.

. (a) How much interest did she pay quarterly? Formula

. (b) What was the total amount of money repaid?
I = PRT
Step 1 Step 2 Step 3

Find the variables Substitute into Answer

of the formula formula (b)

I = PRT I = P + I
P = $24000 24000 x 0.185 x 5.25
= $24000
R = 18.5% 100
I = $23,310 + ?
= 0.185
Total = $47,310
T = 5y3m = 5.25
You-Do
Complete Worksheet

Q1, Q4, Q5 C-level

Q11, Q20 B-level

Q21 A-level
Plough Back
 What is the answer?

If I borrow $30,000 at a rate of 5% over

20 years, how much interest do I pay?

Write your answer in your book