Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount, or the original amount of money, that is deposited or borrowed. It is calculated using the formula: SI = P * r * t, where P is the principal, r is the rate of interest per year, and t is the time in years.

Front

What is the formula for calculating Simple Interest?

Back

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 the principal is $350, the interest rate is 2.5%, and the time is 3 years, how much interest is earned?

Back

$26.25

Front

How do you convert time from months to years for calculating Simple Interest?

Back

To convert time from months to years, divide the number of months by 12.

Front

What does 'P' represent in the Simple Interest formula?

Back

'P' represents the Principal amount, which is the initial sum of money deposited or borrowed.

Front

What does 'r' represent in the Simple Interest formula?

Back

'r' represents the rate of interest, which is the percentage of the principal charged as interest per year.

Front

What does 't' represent in the Simple Interest formula?

Back

't' represents the time period for which the money is borrowed or invested, measured in years.

Front

Emilio borrows $1200 at 8% simple interest for 2 years. What is the total amount he will pay back?

Back

$1392

Front

If Allison inherits $50,000 at 2% interest and cannot access it until she is 21, how much interest will she earn by then?

Back

$9,000

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 plus any interest that has been added to it.