# McGraw Hill Math Grade 8 Lesson 6.9 Answer Key Simple and Compound Interest

Practice the questions of McGraw Hill Math Grade 8 Answer Key PDF Lesson 6.9 Simple and Compound Interest to secure good marks & knowledge in the exams.

## McGraw-Hill Math Grade 8 Answer Key Lesson 6.9 Simple and Compound Interest

Exercises Calculate

Question 1.
How much interest would you earn if you put $500 in a bank for 15 years and received simple interest of 8%? Answer:$ 600.00

Explanation:
Simple Interest SI = $$\frac{P X R X T}{100}$$
P = Principle Amount
R =  Rate of interest in %
T = Time (Number of years)
Amount = Principle + Simple Interest
SI = Amount – Principle
P= $500 R = 8% T = 15 yrs Simple Interest SI = $$\frac{P X R X T}{100}$$ = $$\frac{500 X 8 X 15}{100}$$ = 5 x 8 x 15 = 600 Question 2. Calculate the simple interest on a bank account where you deposit$500 and earn 12% a year for 5 years.
$300.00 Explanation: Simple Interest SI = $$\frac{P X R X T}{100}$$ P = Principle Amount R = Rate of interest in % T = Time (Number of years) Amount = Principle + Simple Interest SI = Amount – Principle P=$500
R = 12%
T = 5 yrs
Simple Interest SI = $$\frac{P X R X T}{100}$$
= $$\frac{500 X 12 X 5}{100}$$
= 5 x 12 x 5
= 300

Question 3.
Calculate the ending balance of your savings account if you deposit $400 and earn simple interest of 7% for 5 years. Answer:$540.0

Explanation:
Simple Interest SI = $$\frac{P X R X T}{100}$$
P = Principle Amount
R =  Rate of interest in %
T = Time (Number of years)
Amount = Principle + Simple Interest
SI = Amount – Principle
P= $400 R = 7% T = 5 yrs Simple Interest SI = $$\frac{P X R X T}{100}$$ = $$\frac{400 X 7 X 5}{100}$$ = 4 x 7 x 5 = 140 the ending balance = Principle + interest A = 400 + 140 = 540 Question 4. Calculate the ending balance of your savings account if you deposited$1,000 and earned simple interest of 6% for 6 years.
$1360.00 Explanation: P = Principle Amount R = Rate of interest in % T = Time (Number of years) Amount = Principle + Simple Interest SI = Amount – Principle P=$1000
R = 6%
T = 6 yrs
Simple Interest SI = $$\frac{P X R X T}{100}$$
= $$\frac{1000 X 6 X 6}{100}$$
= 10 x 6 x 6
= 360
the ending balance = Principle + interest
A = $1000 +$360 = $1360 Exercises Calculate Question 5. Calculate the interest earned over a 5-year period when you deposit$2,000 and earn compound interest of 8% per year.
$938.66 Explanation: Compound Interest CI = P [ 1 + $$\frac{R}{100}$$ ]n – 1 ] P = Principle Amount R = Rate of interest in % T = Time (Number of years) P=$1000
R = 8%
n = 5 yrs
Compound Interest CI = P [ 1 + $$\frac{R}{100}$$ ]n – 1 ]
CI = 2000 [ 1 + $$\frac{8}{100}$$]5 – 1 ]
=2000 $$\frac{108}{100}$$5 – 1 ]
= 2000 x 0.469
= $938.66 Question 6. How much interest would you earn if you put$500 in a bank for 20 years and received a compound interest rate of 4%?
$595.56 Explanation: Compound Interest CI = P [ 1 + $$\frac{R}{100}$$ ]n – 1 ] P = Principle Amount R = Rate of interest in % T = Time (Number of years) P=$500
R = 4%
n = 20 yrs
Compound Interest CI = P [ 1 + $$\frac{R}{100}$$ ]n – 1 ]
CI = 500 [ 1 + $$\frac{4}{100}$$]20 – 1 ]
=500 $$\frac{108}{100}$$5 – 1 ]
= 500 [ 2.19 – 1]
= 500 x 1.19
= $595.56 Question 7. How much money would you owe if you borrowed$2,000 for 5 years, with a compound interest rate of 28%, and did not make any payments during that period?
$6871.95 Explanation: Compound Interest CI = P [ 1 + $$\frac{R}{100}$$ ]n – 1 ] P = Principle Amount R = Rate of interest in % T = Time (Number of years) P=$2000
R = 28%
n = 5 yrs
Compound Interest CI = P [ 1 + $$\frac{R}{100}$$ ]n – 1 ]
CI = 2000 [ 1 + $$\frac{28}{100}$$]5 – 1 ]
=2000 $$\frac{128}{100}$$5 – 1 ]
= 2000 x 3.435
= $6871.95 Question 8. Is it better to receive compounded interest for 7 years at 12% on your balance of$500, or to receive the same rate of simple interest for 9 years on that same balance?
7 years at 12%
Balance
Compound interest $1105.34 Simple interest$1040.00

Explanation:
Compound Interest CI = P [ 1 + $$\frac{R}{100}$$ ]n – 1 ]
P= $500 R = 12% n = 7 yrs Compound Interest CI = P [ 1 + $$\frac{R}{100}$$ ]n – 1 ] CI = 500 [ 1 + $$\frac{12}{100}$$]7 – 1 ] =500 $$\frac{112}{100}$$7 – 1 ] = 500[2.210 – 1] = 500 x 1.210 =$605.34
the ending balance = Principle + Compound interest
A = $500 +$605.34 = $1,105.34 Amount = Principle + Simple Interest SI = Amount – Principle P=$500
R = 12%
T = 9 yrs
Simple Interest SI = $$\frac{P X R X T}{100}$$
= $$\frac{500 X 12 X 9}{100}$$
= 5 x 12 x 9
= 540.00
the ending balance = Principle + Simple interest
A = $500 +$540 = \$1040.00

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