Materials

  • CCB Mathematics pages 242 - 245

Standards

  • MP.1

  • Analyze proportional relationships and use them to solve real-world and mathematical problems.

Objectives

  • Understand the interest formula

  • Use a formula to find simple interest

Key Concept

  • Simple interest can be calculated using a formula and percents.

Vocabulary

Tier 2 Convert
Interest
Principal
Rate
time
Tier 3 formula

Before Lesson

In this lesson, students continue their work with percents. To determine student readiness, write 60%, 6.6%, and 16% in a column on the board. Write 0.066, 0.16, and 0.6 in a second column on the board. Ask a volunteer to match one of the percents to its equivalent decimal. Then give students an opportunity to match the remaining pairs of numbers. Use students’ answers to determine if a review is necessary

Background

Explain that when you deposit money into a savings account you are actually lending that money to the bank. In return, the bank pays you money, called interest, for the use of your money. Have students discuss the experiences they have had with interest.

Guided Practice

  • Simple Interest Problems

Core Skill

Make Sense of Problems: Have a volunteer read the first paragraph aloud. Write the values from the second paragraph on the board. Label each value with the terms used in the interest formula. Ask students to identify the units of each value. Explain that the time units of the values must all be the same in order to calculate interest correctly.

Solve Real-World Problems: Have students discuss different ways amounts of interest are relevant in their own lives. Ask a volunteer to explain how ratios, percents, multiplication, whole numbers, and fractions, and decimals are applied when calculating the amount of interest in Example 2.

Extension

Connections: Write the words principal, interest, rate, and time on the board. Review the definitions of the words. Explain to students how they can use the Internet to find the annual interest rate for a savings account at a bank. Have students write an interest problem based on the information they learn. Tell students that they will need to determine a principal amount and time on their own. Have students exchange their problem with a partner. Ask students to explain how to solve the problem.

Collect and Display Interest Terms: Have students research various terms associated with interest, such as compounded daily and APR. Students should organize the terms in a display with an explanation for each one, using examples to illustrate how these terms affect the amount of interest paid.