Simple and Compound Interest

Front

What does 'P' represent in the simple interest formula I=Prt?

Back

P represents the Principal amount.

Front

How much simple interest is earned on a principal of $258 at an interest rate of 8.8% over 8 years?

Back

$181.63

Front

What is the formula for compound interest?

Back

A = P(1 + r)^n, where A is the amount, P is the principal, r is the rate, and n is the number of periods.

Front

If Jeff takes a loan of $200 at a simple interest rate of 8% for 3 years, what is the total amount he will pay back?

Back

$248

Front

In the formula I = Prt, what must the rate 'r' be converted into before multiplying?

Back

Decimals.

Front

What is the difference between simple interest and compound interest?

Back

Simple interest is calculated only on the principal amount, while compound interest is calculated on the principal and also on the accumulated interest.

Front

If you invest $1000 at a simple interest rate of 5% for 4 years, how much interest will you earn?

Back

$200.

Front

What is the total amount after earning compound interest on a principal of $1000 at a rate of 5% for 2 years?

Back

$1102.50.

Front

What does 'r' represent in the simple interest formula I=Prt?

Back

r represents the rate of interest.

Front

If the principal is $500 and the interest rate is 10% for 5 years, what is the simple interest?

Back

$250.