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Study Guides > Prealgebra

Introduction to Solving Simple Interest Applications

Scrabble tiles spelling out the word loans How much does a loan really cost?
Have you ever needed to take out a loan? Whether it's to pay for college, buy a car, or purchase a home, people take out loans to help them pay for some of life's most important purchases. But one thing that many people find confusing about loans is how interest is calculated on them. Using the simple interest formula, we can figure out simple interest problems and get a better idea of the true cost of some loans. In this section, we'll explore how to use the simple interest formula and solve simple interest applications.  

Learning Outcomes

By the end of this section, you will be able to:
  • Use the simple interest formula
  • Solve simple interest applications
  Before you get started in this module, try a few practice problems and review prior concepts.

readiness quiz

  1. Solve [latex]0.6y=45[/latex].If you missed this problem, review [link].
  2. Solve [latex]\frac{n}{1.45}=4.6[/latex].If you missed this problem, review [link].

Licenses & Attributions

CC licensed content, Shared previously

  • Loans. Authored by: GotCredit at GotCredit.com. Located at: https://www.flickr.com/photos/gotcredit/30023382120/. License: CC BY: Attribution.

CC licensed content, Specific attribution