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 the principal amount, R is the rate of interest per year, and T is the time in years.

Front

If you invest $1,000 at a 5% simple interest rate for 3 years, how much interest will you earn?

Back

You will earn $150 in interest. (SI = 1000 × 0.05 × 3 = $150)

Front

What is the total amount in the account after earning simple interest?

Back

Total Amount = Principal + Simple Interest.

Front

If you have $500 at a 4% simple interest rate for 2 years, what is the total amount after 2 years?

Back

Total Amount = $500 + ($500 × 0.04 × 2) = $500 + $40 = $540.

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. For example, 6 months = 6/12 = 0.5 years.

Front

What is the simple interest on $2,000 at a 6% rate for 5 years?

Back

The simple interest is $600. (SI = 2000 × 0.06 × 5 = $600)

Front

If you have a principal of $1,500 and earn $225 in simple interest, what was the interest rate if the time period was 3 years?

Back

The interest rate was 5%. (R = SI / (P × T) = 225 / (1500 × 3) = 0.05 or 5%)

Front

What is the simple interest on $750 at a 3% rate for 15 years?

Back

The simple interest is $337.50. (SI = 750 × 0.03 × 15 = $337.50)

Front

How much will you have in total if you invest $4,000 at a 5% simple interest rate for 5 years?

Back

You will have $5,000 in total. (SI = 4000 × 0.05 × 5 = $1,000; Total = $4000 + $1000 = $5000)