Simple Interest Quan Mod

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount only, without compounding. It is calculated using the formula: I = P * R * T, where I is the interest, P is the principal, R is the rate of interest per year, and T is the time in years.

Front

What does the variable 'P' represent in the formula I = P * R * T?

Back

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

Front

What does the variable 'R' represent in the formula I = P * R * T?

Back

'R' represents the rate of interest, expressed as a decimal, that is charged or earned per year.

Front

What does the variable 'T' represent in the formula I = P * R * T?

Back

'T' represents the time period in years for which the money is borrowed or invested.

Front

How do you calculate the total amount to be paid back on a loan with simple interest?

Back

Total Amount = Principal + Interest, where Interest = P * R * T.

Front

If Mason borrows $1200 at 8% simple interest for 2 years, how much interest does he pay?

Back

Interest = 1200 * 0.08 * 2 = $192.

Front

What is the total amount Mason has to pay back after 2 years?

Back

Total Amount = Principal + Interest = 1200 + 192 = $1392.

Front

If Abigail deposits $200 at 6% interest for 2 years, how much interest will she earn?

Back

Interest = 200 * 0.06 * 2 = $24.

Front

What is the formula to find the amount of money that can be borrowed based on future expected income?

Back

Amount Borrowed = Future Amount / (1 + (R * T)).

Front

If Alina expects to receive $2000 in 6 months and the bank offers a 5.60% annual interest rate, how much can she borrow now?

Back

Amount Borrowed = 2000 / (1 + (0.056 * 0.5)) = $1945.53.