11.2, Personal Loans and Simple Interest

• A simple interest loan consists of
  • An amount of money which is borrowed, or the principal (p)
  • A period for which this money is borrowed or the time. (t)
  • An interest rate, usually expressed as a percent per year. (r)
  • An amount of money which must be repaid, or the total amount. (A)
  • The interest, or rent, which must be paid for the principal (i)
• i = prt, A= p+i
• Unless otherwise stated, each year has 12 months or 360 days.
• Unless otherwise stated, the interest rate is an annual percentage rate.
• A discount loan is a loan for which the interest is paid at the time the borrower receives the loan. (work twice)
• Examples: P 618, 9, 11, 12, 13, 15, 17, 21, 25, 27, 29, 32