Simple Interest (7th Grade) 2

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated only on the principal amount, or the original amount of money borrowed or invested.

Front

What is the formula for calculating Simple Interest?

Back

The formula for Simple Interest is I = PRT, 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

If you borrow $500 at a simple interest rate of 5% for 3 years, how much interest will you pay?

Back

I = PRT = 500 * 0.05 * 3 = $75.

Front

What does the 'P' in the interest formula stand for?

Back

The 'P' in the interest formula stands for Principal, which is the initial amount of money borrowed or invested.

Front

What does the 'R' in the interest formula represent?

Back

The 'R' in the interest formula represents the Rate of interest, expressed as a decimal.

Front

Convert 0.25 to a percent.

Back

0.25 as a percent is 25%.

Front

If the principal is $2000, the rate is 4%, and the time is 5 years, what is the total amount paid back?

Back

Total Amount = Principal + Interest = 2000 + (2000 * 0.04 * 5) = $2400.

Front

What is the total amount Amanda will pay for a loan of $6500 at 8% for 5 years?

Back

Total Amount = Principal + Interest = 6500 + (6500 * 0.08 * 5) = $9100.

Front

If you lend $240 and your friend pays you back $270, what is the interest charged?

Back

Interest = Total Paid Back - Principal = 270 - 240 = $30.

Front

What is the interest rate if you charged your friend $30 on a loan of $240?

Back

Interest Rate = (Interest / Principal) * 100 = (30 / 240) * 100 = 12.5%.