Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount only, without compounding.

Front

What is the formula for calculating Simple Interest?

Back

The formula is I = PRT, 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

If you invest $500 at an interest rate of 4% for 2 years, how much interest will you earn?

Back

$40

Front

What does the 'R' in the formula I = PRT represent?

Back

'R' represents the rate of interest per year, expressed as a decimal.

Front

What does the 'T' in the formula I = PRT represent?

Back

'T' represents the time the money is invested or borrowed for, in years.

Front

If the principal is $1,000 and the interest earned is $150 over 3 years, what is the interest rate?

Back

5% per year.

Front

What is the Principal in the context of Simple Interest?

Back

The Principal is the initial amount of money that is either invested or borrowed.

Front

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

Back

Divide the percentage by 100.

Front

If you have a principal of $200 and an interest rate of 3% for 5 years, how much total money will you have at the end?

Back

$230

Front

What is the total amount of money after earning $50 in interest on a principal of $200?

Back

$250