Simple Interest

Front

What is the formula for calculating simple interest?

Back

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

Front

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

Back

The principal, which is the amount of money borrowed or deposited.

Front

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

Back

The rate of interest, expressed as a decimal.

Front

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

Back

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

Front

If you invest $1,000 at a 5% annual interest rate, how much interest will you earn in 3 years?

Back

$150.

Front

How do you convert months to years?

Back

Divide the number of months by 12.

Front

If you earn $200 in interest from a principal of $1,000 over 2 years, what is the interest rate?

Back

10%.

Front

What is the total balance after earning simple interest?

Back

Total Balance = Principal + Interest.

Front

If Anna invested $2,500 at an annual rate of 5%, how much interest will she earn in 4 years?

Back

$500.

Front

What is the simple interest earned on a principal of $800 at a rate of 4% over 5 years?

Back

$160.