Simple/Compound Interest

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What is Simple Interest?

Back

Simple Interest is calculated using the formula: I = P * r * t, where I is the interest, P is the principal amount, r is the rate of interest per year, and t is the time in years.

Tags

CCSS.7.RP.A.3

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What is Compound Interest?

Back

Compound Interest is calculated on the initial principal, which also includes all of the accumulated interest from previous periods. The formula is A = P (1 + r/n)^(nt), where A is the amount of money accumulated after n years, including interest.

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How do you calculate Simple Interest?

Back

To calculate Simple Interest, use the formula: I = P * r * t.

Tags

CCSS.7.RP.A.3

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How do you calculate Compound Interest?

Back

To calculate Compound Interest, use the formula: A = P (1 + r/n)^(nt), where n is the number of times interest is compounded per year.

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What is the principal amount in interest calculations?

Back

The principal amount is the initial sum of money borrowed or invested, before interest.

Tags

CCSS.7.RP.A.3

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What does 'rate of interest' mean?

Back

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

Tags

CCSS.7.RP.A.3

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What is the time period in interest calculations?

Back

The time period is the duration for which the money is borrowed or invested, usually measured in years.

Tags

CCSS.7.RP.A.3

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If Victor borrows $30,000 at a 7% simple interest rate for 8 years, how much interest will he pay?

Back

$16,800.

Tags

CCSS.7.RP.A.3

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If Nathalie borrows $25,000 at a 6.5% compound interest rate for 15 years, what will be her total amount?

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$64,269.

Tags

CCSS.HSF-LE.A.1C

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Which bank gives more interest: Bank A (4% for 10 years) or Bank B (6% for 6 years) on $25,000?

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Bank A gives $10,000.

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CCSS.HSF.BF.A.2