Simple Interest Practice

Front

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: Interest = Principal × Rate × Time.

Front

What is the formula for calculating Simple Interest?

Back

The formula for calculating Simple Interest is: Interest = Principal × Rate × Time.

Front

If you borrow $1,000 at an interest rate of 5% for 3 years, how much interest will you pay?

Back

Interest = $1,000 × 0.05 × 3 = $150.

Front

How do you calculate the total amount to be paid back on a loan with Simple Interest?

Back

Total Amount = Principal + Interest.

Front

If you have $200 in a savings account that earns 4% interest annually, how much interest will you earn in 1 year?

Back

Interest = $200 × 0.04 × 1 = $8.

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

How do you convert a percentage to a decimal for calculations?

Back

To convert a percentage to a decimal, divide by 100. For example, 5% becomes 0.05.

Front

If you lend $500 to a friend at a 10% interest rate for 2 years, how much total will your friend pay you back?

Back

Interest = $500 × 0.10 × 2 = $100. Total = $500 + $100 = $600.

Front

What is the interest earned on a loan of $1,500 at 6% for 4 years?

Back

Interest = $1,500 × 0.06 × 4 = $360.

Front

If you want to find the interest rate charged on a loan, which formula would you use?

Back

Interest Rate = (Interest / Principal) / Time.