Simple Interest CW

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated only on the principal amount, or the original amount of money borrowed or invested.

Front

How do you calculate Simple Interest?

Back

Simple Interest = Principal × Rate × Time.

Front

What does 'Principal' mean in finance?

Back

Principal is the original sum of money borrowed or invested, before interest.

Front

What is the formula to convert a percentage to a decimal?

Back

To convert a percentage to a decimal, divide by 100. For example, 7.25% = 7.25 ÷ 100 = 0.0725.

Front

If you have $1,000 at a 5% simple interest rate for 2 years, how much interest will you earn?

Back

Interest = $1,000 × 0.05 × 2 = $100.

Front

What is the time period in years for 18 months?

Back

18 months is equal to 1.5 years.

Front

What is the interest earned on a $4,500 savings account at 2.5% simple interest over 3 years?

Back

Interest = $4,500 × 0.025 × 3 = $337.50.

Front

What is the interest earned on a loan of $500 at 5% for 5 years?

Back

Interest = $500 × 0.05 × 5 = $125.

Front

How do you find the total amount after interest is added?

Back

Total Amount = Principal + Interest.

Front

What is the interest paid on a loan of $25,690 at a simple interest rate of 5.2% over 5 years?

Back

Interest = $25,690 × 0.052 × 5 = $6,679.40.