Simple Interest Intro

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 = P * r * t.

Front

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

Back

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

Front

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

Back

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

Front

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

Back

't' represents the Time the money is invested or borrowed, usually expressed in years.

Front

Calculate the simple interest earned on a principal of $500 at a rate of 5% over 5 years.

Back

The interest earned is $125.

Front

If you invest $200 at a rate of 5% for 2 years, how much interest will you earn?

Back

You will earn $20 in interest.

Front

What is the formula to calculate Simple Interest?

Back

The formula is I = P * r * t.

Front

If the principal is $500 and the interest rate is 10% for 8 years, what is the simple interest earned?

Back

The simple interest earned is $400.

Front

What is the difference between Simple Interest and Compound Interest?

Back

Simple Interest is calculated only on the principal, while Compound Interest is calculated on the principal plus any interest that has already been added.

Front

If you have a principal of $1000 and an interest rate of 3% for 4 years, what is the interest earned?

Back

The interest earned is $120.