Commission/Simple Interest

Front

What is the formula for calculating simple interest?

Back

I = PRT, where I is the interest, P is the principal amount, R is the rate of interest, and T is the time in years.

Front

In the simple interest formula I = PRT, what does P represent?

Back

P represents the principal amount, which is the initial amount of money borrowed, deposited, or invested.

Front

In the simple interest formula I = PRT, what does R represent?

Back

R represents the rate of interest, expressed as a decimal.

Front

In the simple interest formula I = PRT, what does T represent?

Back

T represents the time the money is borrowed or invested, measured in years.

Front

If Jerry borrowed $4,000 at a 6% simple interest rate for 5 years, how much interest will he pay?

Back

$1,200.

Front

How do you convert a percentage to a decimal for calculations?

Back

Divide the percentage by 100. For example, 6% becomes 0.06.

Front

If Ann puts $300 in a bank account earning 4% interest, how much interest will she earn in 1 year?

Back

$12.

Front

What is the sales commission formula?

Back

Sales Commission = Amount × Rate.

Front

If the amount is $234.00 and the commission rate is 11%, what is the commission?

Back

$25.74.

Front

What is the difference between simple interest and compound interest?

Back

Simple interest is calculated only on the principal amount, while compound interest is calculated on the principal and also on the accumulated interest.