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: Simple Interest = Principal × Rate × Time.

Front

What is the formula for calculating Simple Interest?

Back

The formula for calculating Simple Interest is: SI = P × R × T, where SI is Simple Interest, P is the principal amount, R is the rate of interest per year, and T is the time in years.

Front

If the principal is $500, the rate is 10%, and the time is 8 months, what is the Simple Interest?

Back

The Simple Interest is $33.50.

Front

How do you convert months into years for calculating Simple Interest?

Back

To convert months into years, divide the number of months by 12. For example, 8 months = 8/12 = 2/3 years.

Front

What is the Simple Interest earned on a principal of $2,000 at an 8% rate for 5 years?

Back

The Simple Interest earned is $800.

Front

How do you find the total amount after earning Simple Interest?

Back

Total Amount = Principal + Simple Interest.

Front

If a deposit of $10,000 earns $6,000 in interest over 12 years, what is the Simple Interest rate?

Back

The Simple Interest rate is 5%.

Front

What is the Simple Interest earned on a loan of $4,750 at a rate of 19.5% for 30 months?

Back

The Simple Interest earned is $2315.63.

Front

What does 'principal' mean in the context of Simple Interest?

Back

Principal is the initial amount of money that is either invested or borrowed before any interest is added.

Front

What does 'rate' refer to in Simple Interest calculations?

Back

Rate refers to the percentage of interest charged or earned on the principal amount, typically expressed annually.