Interest Flashcard

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount only, without compounding. It can be calculated using the formula: SI = P * r * t, where 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 (SI) is: SI = P * r * t, where P is the principal amount, r is the rate of interest (in decimal), and t is the time (in years).

Front

If you invest $350 at an interest rate of 2.5% for 3 years, how much interest will you earn?

Back

$26.25

Front

What is the principal amount in a simple interest problem?

Back

The principal amount is the initial sum of money that is invested or loaned, before any interest is applied.

Front

How do you convert a percentage to a decimal for calculations?

Back

To convert a percentage to a decimal, divide the percentage by 100. For example, 2.5% becomes 0.025.

Front

If the principal is $800 and the interest rate is 3.5% for 6 months, how much interest is earned?

Back

$14

Front

What is the total balance in an account after earning simple interest?

Back

The total balance can be calculated by adding the simple interest earned to the principal amount: Total Balance = Principal + Simple Interest.

Front

Calculate the interest earned on $34,100 at a rate of 4% over 3 years.

Back

$4,092

Front

What is the total amount paid after borrowing $7,400 at 9.5% interest for 8 years?

Back

$13,024

Front

What does 'time' refer to in the context of simple interest?

Back

In simple interest, 'time' refers to the duration for which the money is invested or borrowed, usually measured in years.