Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount only, without compounding.

Front

What is the formula for calculating Simple Interest?

Back

The formula is I = PRT, where I is the interest, P is the principal, R is the rate of interest per year, 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 initial 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 percentage.

Front

What does 'T' represent in the Simple Interest formula?

Back

T represents the time the money is borrowed or invested, measured in years.

Front

If the principal is $1,000, the rate is 5%, and the time is 2 years, what is the Simple Interest?

Back

I = PRT = 1000 * 0.05 * 2 = $100.

Front

How do you convert a percentage to a decimal?

Back

To convert a percentage to a decimal, divide by 100. For example, 5% becomes 0.05.

Front

If Kermit took out a loan of $5,500 and paid $1,870 in interest over 4 years, what was his interest rate?

Back

The interest rate is 8.5%.

Front

What is the total amount to be paid back if the principal is $1,000, the interest is $100, and the time is 2 years?

Back

Total amount = Principal + Interest = $1,000 + $100 = $1,100.

Front

If the principal is $10,000, the rate is 7%, and the time is 20 years, what is the Simple Interest?

Back

I = PRT = 10000 * 0.07 * 20 = $14,000.