Simple Interest

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What is Simple Interest?

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Simple Interest is the interest calculated on the principal amount only, without compounding. It is calculated using the formula I = PRT, where I is the interest, P is the principal, R is the rate of interest, and T is the time in years.

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What is the formula for calculating Simple Interest?

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The formula for calculating Simple Interest is I = PRT.

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In the formula I = PRT, what does 'P' stand for?

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In the formula I = PRT, 'P' stands for Principal, which is the initial amount of money borrowed or invested.

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In the formula I = PRT, what does 'R' represent?

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In the formula I = PRT, 'R' represents the Rate of interest, expressed as a decimal.

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In the formula I = PRT, what does 'T' represent?

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In the formula I = PRT, 'T' represents Time, which is the duration for which the money is borrowed or invested, measured in years.

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If you borrow $1000 at a 10% interest rate for 3 years, how much interest will you pay?

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The interest will be $300, calculated as I = 1000 * 0.10 * 3.

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How do you convert a percentage to a decimal?

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To convert a percentage to a decimal, divide the percentage by 100. For example, 8% becomes 0.08.

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If the principal is $2000 and the interest earned is $400, what is the rate of interest if the time is 2 years?

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The rate of interest is 10%, calculated using the formula R = I / (PT) = 400 / (2000 * 2).

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What is the total amount to be paid back if you borrow $1500 at 5% interest for 4 years?

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The total amount to be paid back is $1800, calculated as Total Amount = Principal + Interest = 1500 + (1500 * 0.05 * 4).

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If you pay $60 in interest on a loan of $1200 over 2 years, what is the interest rate?

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The interest rate is 2.5%, calculated using the formula R = I / (PT) = 60 / (1200 * 2).