Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount only, without compounding. It is 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 Principal, R is Rate (as a decimal), and T is Time (in years).

Front

If the Principal is $1500, the Rate is 12%, and the Time is 1.5 years, what is the Simple Interest?

Back

Simple Interest = 1500 × 0.12 × 1.5 = $270.

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.

Front

What is the total amount to be repaid if the Principal is $1200, the Rate is 8%, and the Time is 2 years?

Back

Total Amount = Principal + Simple Interest = 1200 + (1200 × 0.08 × 2) = $1392.

Front

If Maria borrowed $3000 at a 4% interest rate for 4 years, how much interest did she pay?

Back

Simple Interest = 3000 × 0.04 × 4 = $480.

Front

What is the total amount Maria has to repay after 4 years?

Back

Total Amount = Principal + Simple Interest = 3000 + 480 = $3480.

Front

If the Principal is $800, the Rate is 3.5%, and the Time is 6 months, what is the Simple Interest earned?

Back

Convert 6 months to years: 6/12 = 0.5 years. Simple Interest = 800 × 0.035 × 0.5 = $14.

Front

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

Back

Principal is the initial amount of money borrowed or invested before interest is applied.

Front

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

Back

Rate refers to the percentage of interest charged on the principal amount, usually expressed as an annual rate.