Simple Interest

Front

What is Simple Interest?

Back

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

If Dan borrowed $2,000 for 6 months at 12% annual simple interest, how much interest does he owe?

Back

$120

Front

How do you convert months into years?

Back

To convert months into years, divide the number of months by 12. For example, 9 months is 9/12 = 0.75 years.

Front

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

Back

The 'P' in the formula I = PRT represents the Principal amount, which is the initial sum of money borrowed or invested.

Front

Calculate the simple interest for a principal of $6,000 at an interest rate of 5% for 6 months.

Back

$150

Front

What is the annual interest rate if the simple interest earned on a principal of $1,000 over 2 years is $200?

Back

The annual interest rate is 10%.

Front

If the principal is $500 and the interest earned is $75 over 3 years, what is the annual interest rate?

Back

The annual interest rate is 5%.

Front

What is the time period in years if the simple interest is $60, the principal is $1,200, and the annual interest rate is 5%?

Back

The time period is 1 year.

Front

How much interest will be earned on a principal of $800 at an interest rate of 4% over 1.5 years?

Back

$48.