Simple Interest Test Review

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: I = P * r * t, where I is the interest, P is the principal, r is the rate of interest per year, 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, where I is the interest, P is the principal amount, r is the annual interest rate (in decimal), and t is the time in years.

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, 12.5% becomes 0.125.

Front

If you invest $100 at an interest rate of 5% for 3 years, what is the Simple Interest earned?

Back

The Simple Interest earned is $15.00.

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What is the principal amount in a Simple Interest problem?

Back

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

Front

How do you find the total amount after earning Simple Interest?

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The total amount (A) after earning Simple Interest can be calculated using the formula: A = P + I, where I is the Simple Interest.

Front

If the interest earned is $30 on a principal of $80 over 3 years, what is the interest rate?

Back

The interest rate is 12.5%.

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What is the interest earned on $100 at 3% for 6 years?

Back

The interest earned is $18.00.

Front

How do you calculate the time if you know the interest, principal, and rate?

Back

You can rearrange the Simple Interest formula to find time: t = I / (P * r).

Front

What is the interest rate if the principal is $400 and the interest earned is $90 over 5 years?

Back

The interest rate is 4.5%.