Simple Interest

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What is simple interest?

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Simple interest is a method of calculating the interest charge on a loan or financial product based on the original principal amount and a fixed interest rate over a specified period of time.

Tags

CCSS.7.RP.A.3

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How is simple interest calculated?

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Simple interest is calculated using the formula: I = P * r * t, where I is the interest, P is the principal amount, r is the annual interest rate (in decimal), and t is the time in years.

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CCSS.7.RP.A.3

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If Ethan borrowed $2,190 at a simple interest rate of 2.5% for 3 years, how much interest will he pay?

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Ethan will pay $164.25 in interest.

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CCSS.7.RP.A.3

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What is the total amount Mark will pay back if he took a loan of $15,000 at 5% simple interest for 6 years?

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Mark will pay a total of $17,500.

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CCSS.HSF.BF.A.2

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What is the total amount Veronica will pay for a loan of $5,500 at 3.25% simple interest for 48 months?

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Veronica will pay a total of $6,215.00.

Tags

CCSS.7.RP.A.3

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Which loan option is better for Miles: a 3-year loan at 10% simple interest or a 5-year loan at 6.5% simple interest?

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Option A (3-year loan at 10%) is better, and he will save $28.75.

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How do you determine the better loan option when comparing two loans with different interest rates and terms?

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To determine the better loan option, calculate the total amount paid for each loan using the simple interest formula and compare the totals.

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CCSS.8.F.A.2

CCSS.HSF.IF.C.9

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What is the difference in interest earned between City Bank's 4.75% and First National's 3.9% simple interest rates on a $500 account after 12 years?

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Tom will earn $51 more in interest at City Bank compared to First National.

Tags

CCSS.7.RP.A.3

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What is the principal amount in a simple interest calculation?

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The principal amount is the initial sum of money borrowed or invested, before any interest is added.

Tags

CCSS.7.RP.A.3

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What does the term 'interest rate' refer to in the context of simple interest?

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The interest rate is the percentage at which interest is calculated on the principal amount, typically expressed as an annual rate.

Tags

CCSS.7.RP.A.3