Math 1 · Unit 8 · Lesson 1

Simple Interest, the Line in Money

Lines add, exponentials multiply, and this unit is both with money. Simple interest pays the rate on the principal only, the money you started with, so the balance goes up by the same number of dollars every year. That is a constant difference, a line: the principal is the y-intercept and the dollars added each year are the slope. Then use the Unit 1 moves to solve the formula I = Prt for any letter.

About 40 minutes Simple interest adds

The big idea

Simple interest adds, compound interest multiplies, and this lesson is the adding one. Simple interest pays the rate on the principal only, so every year earns the same Pr dollars: I = Prt, and the balance is A = P + Prt. A quantity that adds the same amount every step has a constant difference, and that is a line. The principal P is the y-intercept, the starting value, and Pr is the slope, the dollars added each year. The formula has four letters, and the Unit 1 move finds any of them: whatever is multiplied onto the letter you want, divide both sides by it, so r is I over Pt, t is I over Pr, and P is I over rt.

The parts of this lesson

Each part is its own short page. Go in order, or pick the one you need.

1The Words We UseThe vocabulary for this lesson, in one place.Start here 2Both families, with money: the words firstUnit 7 gave you two families: lines add, exponentials multiply. 3Simple interest adds the same amount every yearSimple interest pays the rate on the principal only, so you earn the same amount every year. 4Solve the formula for any letterThe formula I = Prt has four letters. 5Practice ProblemsTry them, get help one step at a time, then print how it went.

Printables

One page with the words, I = Prt and A = P + Prt, the line connection, the three solved forms, and a worked example. Plus a worksheet with an answer key and a short lesson plan.

Study guide (PDF) Worksheet and answer key (PDF) Lesson plan (PDF)

Where this goes next

Previous lesson: Building and Using Exponential ModelsThe end of Unit 7. Next lesson: Compound Interest, Interest on InterestInterest earns interest, and the line becomes an exponential. Back to the Math 1 mapEvery Math 1 lesson, in course order. Tell us what you thoughtA few quick questions about this lesson. It takes a minute, and it is how the lesson gets better.

NC Math 1 standards in this lesson: NC.M1.A-SSE.1a (interpret the parts of an expression), NC.M1.F-LE.5 (interpret the parameters in context), NC.M1.A-CED.4 (solve a formula for a quantity), NC.M1.F-IF.2 (function notation in context).