Simple Interest

Front

How do you convert time from months to years when calculating simple interest?

Back

Write the months as a fraction with 12 as the denominator.

Front

What does the 'P' represent in the simple interest formula I=Prt?

Back

The principal, which is the amount of money borrowed or deposited.

Front

If Anna invested $2,500 at an annual rate of 5%, how long will it take her to earn $1,125 in interest?

Back

9 years.

Front

What is the formula for calculating simple interest?

Back

I = Prt, where I is the interest, P is the principal, r is the rate, and t is the time.

Front

If the principal is $500, the interest rate is 5%, and the time is 5 years, what is the interest earned?

Back

$125.

Front

What is the interest earned on a principal of $800 at an interest rate of 3.5% over 6 months?

Back

$14.

Front

What is the definition of simple interest?

Back

Simple interest is the interest calculated only on the principal amount, or on that portion of the principal amount which remains unpaid.

Front

How do you calculate simple interest?

Back

Multiply the principal amount (P) by the interest rate (r) and the time (t) in years: I = Prt.

Front

What is the time in years if you have 24 months?

Back

2 years.

Front

If you have a principal of $1,000 and an interest rate of 4% for 3 years, what is the simple interest earned?

Back

$120.