Simple Interest Review 2

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: 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

What is the formula for calculating Simple Interest?

Back

The formula for calculating Simple Interest is I = PRT, where I is the interest, P is the principal amount, R is the rate of interest (in decimal), and T is the time (in years).

Front

If you earn $240 in simple interest at a rate of 3% over 8 years, what is the principal?

Back

The principal is $1000.

Front

How do you find the principal if you know the interest, rate, and time?

Back

Rearrange the simple interest formula: P = I / (RT).

Front

If $1,500 earns $450 in simple interest over 5 years, what is the annual interest rate?

Back

The annual interest rate is 6%.

Front

What is the relationship between principal, interest, rate, and time in simple interest?

Back

The relationship is defined by the formula I = PRT, showing that interest is directly proportional to principal, rate, and time.

Front

If P = 25000, R = 3%, and T = 4 years, how much interest is earned?

Back

The interest earned is $3000.

Front

What does the rate of interest represent in simple interest calculations?

Back

The rate of interest represents the percentage of the principal that is paid as interest over a specific period of time.

Front

If I = 940, R = 3%, and T = 3 years, how much principal was deposited?

Back

The principal deposited is $10444.44.

Front

How does time affect the amount of simple interest earned?

Back

The amount of simple interest earned increases with time, as interest is calculated for each year the principal is invested.