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 = 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

If you borrow $1000 at a 5% interest rate for 3 years, how much interest will you pay?

Back

$150

Front

What does 'P' represent in the Simple Interest formula I = P * r * t?

Back

P represents the principal amount, which is the initial sum of money borrowed or invested.

Front

What does 'r' represent in the Simple Interest formula I = P * r * t?

Back

r represents the rate of interest, expressed as a decimal.

Front

What does 't' represent in the Simple Interest formula I = P * r * t?

Back

t represents the time the money is borrowed or invested, measured in years.

Front

If you have $2000 in a bank account with a 3% interest rate, how much interest will you earn in 4 years?

Back

$240

Front

What is the total amount to be paid back if you borrow $1500 at 6% interest for 5 years?

Back

$1800

Front

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

Back

Divide the percentage by 100. For example, 5% becomes 0.05.

Front

If you want to find the total amount after interest, which formula would you use?

Back

Total Amount = Principal + Interest (A = P + I).