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 I = P * r * t, where I is the interest, P is the principal, r is the rate of interest, and t is the time in years.

Front

What is the formula for calculating Simple Interest?

Back

The formula for calculating Simple Interest is I = P * r * t.

Front

If 9 months is how many years?

Back

0.75 years.

Front

How much interest will Ann earn in 1 year if she puts $300 in a bank account earning 4% interest?

Back

$12.

Front

What does 't' represent in the simple interest formula I = P * r * t?

Back

't' represents Time in years.

Front

If Lee borrowed $1500 at an annual simple interest rate of 12% and paid $270 in interest, for what time period did he borrow the money?

Back

1.5 years.

Front

What is the principal amount in a simple interest calculation?

Back

The principal amount is the initial sum of money that is invested or borrowed.

Front

What does the rate (r) represent in the simple interest formula?

Back

The rate (r) represents the percentage of interest charged or earned on the principal amount per year.

Front

How do you convert months to years?

Back

To convert months to years, divide the number of months by 12.

Front

If the principal is $350 and the interest rate is 2.5%, how much interest is earned in 3 years?

Back

$26.25.