Simple interest

Front

What is simple interest?

Back

Simple interest is the interest calculated on the principal amount only, without compounding. It is typically calculated using the formula I = P * r * t.

Tags

CCSS.7.RP.A.3

Front

What does P stand for in the simple interest formula I = P * r * t?

Back

P stands for the principal amount, which is the initial sum of money deposited or borrowed.

Tags

CCSS.7.RP.A.3

Front

What does r represent in the simple interest formula I = P * r * t?

Back

r represents the interest rate, expressed as a decimal.

Tags

CCSS.6.EE.B.7

Front

What does t represent in the simple interest formula I = P * r * t?

Back

t represents the time the money is deposited or borrowed for, usually measured in years.

Tags

CCSS.6.EE.B.7

Front

Calculate the simple interest earned on a principal of $200 at a rate of 5% over 5 years.

Back

I = P * r * t = 200 * 0.05 * 5 = $50.

Tags

CCSS.7.RP.A.3

Front

If you deposit $800 and earn $100 in interest over 5 years, what is the interest rate?

Back

The interest rate is 2.5%.

Tags

CCSS.7.RP.A.3

Front

How much interest will Howard pay if he borrows $4,000 at an 8% interest rate for 2 years?

Back

Howard will pay $640 in interest.

Tags

CCSS.7.RP.A.3

Front

What is the formula for calculating simple interest?

Back

The formula for simple interest is I = P * r * t.

Tags

CCSS.7.RP.A.3

Front

If the principal is $1,000, the rate is 4%, and the time is 3 years, what is the simple interest?

Back

I = 1000 * 0.04 * 3 = $120.

Tags

CCSS.7.RP.A.3

Front

What is the total amount to be paid back if you borrow $500 at a 6% interest rate for 4 years?

Back

Total amount = Principal + Interest = 500 + (500 * 0.06 * 4) = $680.

Tags

CCSS.7.RP.A.3