Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount, or the original amount of money, over a specific period of time at a fixed interest rate.

Tags

CCSS.7.RP.A.3

Front

What is the formula for calculating Simple Interest?

Back

The formula for Simple Interest is: SI = P * r * t, where SI is the simple interest, P is the principal amount, r is the rate of interest per year (in decimal), and t is the time in years.

Tags

CCSS.7.RP.A.3

Front

If you deposit $500 at an interest rate of 10% for 2 years, what is the Simple Interest?

Back

SI = 500 * 0.10 * 2 = $100.

Tags

CCSS.7.RP.A.3

Front

What is the principal in a Simple Interest calculation?

Back

The principal is the initial amount of money that is either deposited or borrowed before interest is applied.

Tags

CCSS.7.RP.A.3

Front

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

Back

To convert a percentage to a decimal, divide the percentage by 100. For example, 10% becomes 0.10.

Front

If a loan of $1,500 has a Simple Interest of $356.25, what is the interest rate if the loan is for 15 months?

Back

First, convert 15 months to years: 15/12 = 1.25 years. Then use the formula: r = SI / (P * t) = 356.25 / (1500 * 1.25) = 0.19 or 19%.

Front

What is the total amount in the account after earning Simple Interest?

Back

The total amount is calculated as: Total Amount = Principal + Simple Interest.

Tags

CCSS.7.RP.A.3

Front

If you earn $800 in Simple Interest on a principal of $2,000 over 5 years, what is the interest rate?

Back

Using the formula: r = SI / (P * t) = 800 / (2000 * 5) = 0.08 or 8%.

Tags

CCSS.7.RP.A.3

Front

What is the time period in years if you earn $270 in Simple Interest on a loan of $750 at an 18% interest rate?

Back

Using the formula: t = SI / (P * r) = 270 / (750 * 0.18) = 2 years.

Tags

CCSS.6.EE.B.7

Front

How does the time period affect Simple Interest?

Back

The longer the time period, the more Simple Interest will accumulate, as it is directly proportional to time.

Tags

CCSS.7.RP.A.2C