3.6 Simple Interest Problems

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: I = P * R * T, 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 = P * R * T.

Front

If the principal amount is $1000, the rate is 5%, and the time is 3 years, what is the Simple Interest?

Back

The Simple Interest is $150.

Front

What does 'Principal' mean in the context of Simple Interest?

Back

Principal is the initial amount of money that is deposited or borrowed before interest is applied.

Front

How do you calculate the total amount to be paid back after borrowing money with Simple Interest?

Back

Total Amount = Principal + Simple Interest.

Front

If you earn $30 in Simple Interest on a principal of $600 over 2 years, what is the rate of interest?

Back

The rate of interest is 2.5%.

Front

What is the time period if the Simple Interest earned is $200, the principal is $1000, and the rate is 5%?

Back

The time period is 4 years.

Front

How much interest will you earn on a $500 deposit at a 6% interest rate over 1 year?

Back

You will earn $30 in interest.

Front

What is the principal amount if the Simple Interest earned in 5 years at a rate of 4% is $100?

Back

The principal amount is $500.

Front

If you borrow $800 at a rate of 7% for 3 years, how much interest will you pay?

Back

You will pay $168 in interest.