8. lesson 8 homework practice financial literacy
Question:
What are the three biggest things that change interest rates?
Answer:
Find, to the nearest cent, the simple interest earned for each principal, interest rate, and amount of time. $750, 7%, 3 years.
Here’s what to do. Just subtract 100 from the first number. (move the decimal point two places to the right)
750 / 100 = 7.5
Now, you multiply that number by the interest rate, which is 7 in this case.
7.5 x 7 = 52.5
The final step is to multiply that number by how many years have passed. This time, the 3.
52.5 x 3 = $157.50
That much would have been added after three years! Don’t forget that this is just basic curiosity. Compound interest is a little harder to figure out.
