Simple Interest

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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 interest, P is principal, R is rate (as a decimal), and T is time in years.

Tags

CCSS.7.RP.A.3

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What is the formula for calculating Simple Interest?

Back

The formula for calculating Simple Interest is I = P * R * T.

Tags

CCSS.7.RP.A.3

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If Timmi puts $300 in a bank account earning 4% interest, how much interest will she earn in 1 year?

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$12.

Tags

CCSS.7.RP.A.3

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, 7.5% becomes 0.075.

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What does the 'P' in the interest formula stand for?

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'P' stands for Principal, which is the initial amount of money invested or borrowed.

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What does the 'R' in the interest formula stand for?

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'R' stands for Rate, which is the percentage of interest charged or earned.

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What does the 'T' in the interest formula stand for?

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'T' stands for Time, which is the duration for which the money is invested or borrowed, measured in years.

Tags

CCSS.8.EE.C.7B

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If the interest rate is 6.17%, what number do you use in the formula for the rate?

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0.0617.

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What is the interest earned on an investment of $500 at a rate of 5% for 2 years?

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$50.

Tags

CCSS.7.RP.A.3

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What is the interest earned on an investment of $1,000 at a rate of 3% for 1 year?

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$30.

Tags

CCSS.HSF.BF.A.2