Commission and Simple Interest

Front

What is Commission?

Back

Commission is a fee paid to an employee or agent for transacting a piece of business or performing a service, typically calculated as a percentage of the sales made.

Front

How do you calculate Commission?

Back

Commission = Sales Amount × Commission Rate.

Front

What is Simple Interest?

Back

Simple Interest is a method of calculating the interest charge on a loan or financial product, based on the original principal amount.

Front

What is the formula for Simple Interest?

Back

I = PRT, where I is the interest, P is the principal, R is the rate (as a decimal), and T is the time in years.

Front

If you have a principal of $1,000, a rate of 5%, and a time of 3 years, what is the interest?

Back

I = 1000 × 0.05 × 3 = $150.

Front

What does Principal mean in finance?

Back

Principal is the original sum of money borrowed or invested, excluding any interest or profits.

Front

What is the total amount to be paid back on a loan?

Back

Total Amount = Principal + Interest.

Front

If a loan of $500 has a simple interest rate of 6% for 2 years, what is the total amount to be paid back?

Back

I = 500 × 0.06 × 2 = $60; Total Amount = 500 + 60 = $560.

Front

What is the difference between Simple Interest and Compound Interest?

Back

Simple Interest is calculated only on the principal amount, while Compound Interest is calculated on the principal and also on the accumulated interest from previous periods.

Front

How do you convert a percentage to a decimal?

Back

To convert a percentage to a decimal, divide by 100. For example, 5% = 5/100 = 0.05.