Simple interest

Front

What is the formula for calculating simple interest?

Back

I = Prt, where I is the interest, P is the principal amount, r is the rate of interest, and t is the time in years.

Front

What does 'P' represent in the simple interest formula?

Back

P represents the principal, which is the amount of MONEY borrowed or deposited.

Front

What does 'r' represent in the simple interest formula?

Back

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

Front

What does 't' represent in the simple interest formula?

Back

t represents the time in years for which the money is borrowed or invested.

Front

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

Back

I = Prt = 200 * 0.05 * 2 = $20.

Front

How do you convert a percentage to a decimal for calculations?

Back

To convert a percentage to a decimal, divide by 100. For example, 4% becomes 0.04.

Front

What is the total amount after earning simple interest?

Back

Total Amount = Principal + Interest.

Front

If Julie borrowed $3,500 for 3 years at 7.5% simple interest, how much interest does she owe?

Back

I = Prt = 3500 * 0.075 * 3 = $787.50.

Front

What is the interest earned on $300 at 4% for 1 year?

Back

I = Prt = 300 * 0.04 * 1 = $12.

Front

If you have a principal of $1,000, a rate of 3%, and a time of 4 years, what is the interest?

Back

I = Prt = 1000 * 0.03 * 4 = $120.