Calculating Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount only, without compounding. It can be calculated using the formula: Interest = Principal × Rate × Time.

Front

How do you calculate Simple Interest?

Back

To calculate Simple Interest, use the formula: Interest = Principal × Rate × Time.

Front

What is the formula to calculate the total amount to be paid back on a loan?

Back

Total Amount = Principal + Interest.

Front

If you borrow $8000 at a 5% interest rate for 3 years, how much interest will you pay?

Back

Interest = $8000 × 0.05 × 3 = $1200.

Front

What is the total amount to be paid back for a loan of $8000 at 5% interest over 3 years?

Back

Total Amount = $8000 + $1200 = $9200.

Front

What does 'Principal' mean in the context of loans?

Back

Principal is the original sum of money borrowed or invested, excluding any interest or profits.

Front

What does 'Rate' refer to in the Simple Interest formula?

Back

Rate refers to the percentage of interest charged on the principal amount, usually expressed as an annual rate.

Front

If Emilio borrows $1200 at 8% interest for 2 years, how much interest does he owe?

Back

Interest = $1200 × 0.08 × 2 = $192.

Front

What is the total amount Emilio has to pay back after borrowing $1200 at 8% for 2 years?

Back

Total Amount = $1200 + $192 = $1392.

Front

How do you find the balance in an account with interest?

Back

Add the interest to the principal amount.