U7/U4p2 on cars, credit cards, Interest (Real word

Front

What is the formula for calculating simple interest?

Back

Simple Interest = Principal × Rate × Time

Front

If the principal is $500, the interest rate is 5%, and the time is 5 years, what is the simple interest earned?

Back

$125

Front

How do you convert months to years?

Back

Divide the number of months by 12.

Front

Convert 18 months to years.

Back

1.5 Years

Front

What is the total amount to be paid back if $1200 is borrowed at 8% simple interest for 2 years?

Back

$1392

Front

Why is establishing a positive credit history important?

Back

It leads to higher credit scores, lower interest rates, and better loan offers.

Front

What does 'minimum payment' mean in the context of credit cards?

Back

It's the lowest payment you can make on your credit card and still be considered up-to-date.

Front

What is the principal in a loan?

Back

The principal is the original sum of money borrowed or invested.

Front

What is the interest rate?

Back

The interest rate is the percentage of the principal charged as interest for a specific period.

Front

What is the total amount paid back on a loan?

Back

Total Amount = Principal + Simple Interest.