Simple Interest Review

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 = Prt, where I is the interest, P is the principal, r is the rate of interest, 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.

Front

If you invest $1000 at a 5% interest rate for 3 years, what is the simple interest earned?

Back

The simple interest earned is $150.

Front

What does 'P' represent in the formula I = Prt?

Back

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

Front

What does 'r' represent in the formula I = Prt?

Back

'r' represents the rate of interest, expressed as a decimal.

Front

What does 't' represent in the formula I = Prt?

Back

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

Front

Convert 12 months into years.

Back

12 months is equal to 1 year.

Front

Convert 25% into a decimal.

Back

25% as a decimal is 0.25.

Front

If you have $5000 at a 6% interest rate for 2 years, what is the simple interest?

Back

The simple interest is $600.

Front

What is the relationship between months and years?

Back

1 year is equal to 12 months.