Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount only, without compounding. It is given by the formula: SI = P * r * t, where SI is the simple interest, P is the principal amount, r is the rate of interest per year, and t is the time in years.

Front

What is the formula for calculating Simple Interest?

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

Front

If you invest $1,000 at a 5% simple interest rate for 3 years, how much interest will you earn?

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The interest earned will be: SI = 1000 * 0.05 * 3 = $150.

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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 that is invested or borrowed before interest is applied.

Front

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

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To convert a percentage to a decimal, divide the percentage by 100. For example, 8% becomes 0.08.

Front

What is the total amount to be paid back if you borrow $1,200 at 8% simple interest for 2 years?

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Total amount = Principal + Simple Interest = 1200 + (1200 * 0.08 * 2) = $1,392.

Front

Calculate the simple interest on a loan of $750 at an 18% interest rate over 2 years.

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SI = 750 * 0.18 * 2 = $270.

Front

What is the total amount owed after borrowing $2,000 at 8% interest for 1 year?

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Total amount = Principal + Simple Interest = 2000 + (2000 * 0.08 * 1) = $2,160.

Front

If you have a principal of $350 and an interest rate of 2.5% for 3 years, what is the simple interest?

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SI = 350 * 0.025 * 3 = $26.25.

Front

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

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In simple interest, 'time' refers to the duration for which the money is borrowed or invested, usually measured in years.