Interest

Front

What does the 'T' in the interest formula stand for?

Back

Time

Front

What is the formula for calculating simple interest?

Back

Simple Interest = Principal × Rate × Time

Front

What is the principal amount in a savings account?

Back

The principal is the initial amount of money deposited before interest.

Front

How do you convert a percentage to a decimal?

Back

Divide the percentage by 100.

Front

What is 4% written as a decimal?

Back

.04

Front

What does it mean for interest to be compounded?

Back

Compounding means that interest is calculated on the initial principal and also on the accumulated interest from previous periods.

Front

If Stacy deposits $520 at a 6% interest rate, what is the rate in decimal form?

Back

.06

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 accumulated interest.

Front

What does it mean if an account earns interest daily?

Back

It means that the interest is calculated and added to the account balance every day.

Front

If Jamie deposits $1040 in her savings account, what is the principal?

Back

$1,040