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: Interest = Principal × Rate × Time.

Front

What is the formula for calculating Simple Interest?

Back

The formula for Simple Interest is: Interest = Principal × Rate × Time.

Front

If you borrow $1000 at a 5% interest rate for 3 years, how much interest will you pay?

Back

Interest = $1000 × 0.05 × 3 = $150.

Front

What is the total amount to be paid back if you borrow $2000 at 4% interest for 2 years?

Back

Total Amount = Principal + Interest = $2000 + ($2000 × 0.04 × 2) = $2080.

Front

How do you convert a percentage to a decimal?

Back

To convert a percentage to a decimal, divide the percentage by 100. For example, 4.3% = 4.3 ÷ 100 = 0.043.

Front

What is the principal in a loan?

Back

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

Front

If the principal is $500, the interest rate is 5%, and the time is 5 years, what is the interest earned?

Back

Interest = $500 × 0.05 × 5 = $125.

Front

What is the total amount after earning $20 in interest on a principal of $200?

Back

Total Amount = Principal + Interest = $200 + $20 = $220.

Front

How much will you pay in total for a loan of $8000 at 5% interest over 3 years?

Back

Total Amount = $8000 + ($8000 × 0.05 × 3) = $9200.

Front

What is the interest earned on a savings account with a principal of $1000 at a rate of 3% over 4 years?

Back

Interest = $1000 × 0.03 × 4 = $120.