12/11/24 Pract. 3-6 Simple Interest

Front

What is simple interest?

Back

Simple interest is a method of calculating the interest charge on a loan or financial investment. It is calculated using the formula: Interest = Principal × Rate × Time.

Front

What is the formula for calculating total amount to be paid back in simple interest?

Back

Total Amount = Principal + Interest, where Interest = Principal × Rate × Time.

Front

If Emilio borrows $1200 at 8% simple interest for 2 years, how much interest does he pay?

Back

Interest = $1200 × 0.08 × 2 = $192.

Front

How much will Emilio have to pay back in total after 2 years?

Back

Total Amount = Principal + Interest = $1200 + $192 = $1392.

Front

What is the principal in a simple interest calculation?

Back

The principal is the initial amount of money borrowed or invested before interest.

Front

What does the rate represent in simple interest?

Back

The rate represents the percentage of interest charged or earned on the principal, usually expressed as an annual rate.

Front

How do you calculate the time in years for simple interest?

Back

Time is calculated in years and is a part of the simple interest formula: Interest = Principal × Rate × Time.

Front

If Anna invests $2,500 at 5% interest, how much interest will she earn in 9 years?

Back

Interest = $2500 × 0.05 × 9 = $1125.

Front

What is the total amount Anna will have after 9 years?

Back

Total Amount = Principal + Interest = $2500 + $1125 = $3625.

Front

How do you find the interest earned over a period of time?

Back

Interest = Principal × Rate × Time.