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 = 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

What is the formula for calculating Simple Interest?

Back

The formula for calculating Simple Interest is I = PRT.

Front

In the formula I = PRT, what does P stand for?

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

Front

In the formula I = PRT, what does R represent?

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

Front

In the formula I = PRT, what does T signify?

Back

T signifies the time in years for which the money is borrowed or invested.

Front

Calculate the Simple Interest on a principal of $200 at a rate of 5% over 2 years.

Back

The Simple Interest is $20.

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Calculate the Simple Interest on a housing loan of $350,000 at a rate of 4.5% over 30 years.

Back

The Simple Interest is $472,500.

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What is the total amount to be paid back on a loan of $10,550 at a rate of 3% over 10 years?

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The total amount to be paid back is $13,715.

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If you have $575 in a savings account at a rate of 2%, what is the interest earned after 1 year?

Back

The interest earned is $11.50.

Front

What does the I in I = PRT mean?

Back

I stands for interest.