Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount only, without compounding. It is calculated using the formula: I = P * r * t, where I is the interest, P is the principal, r is the rate of interest, 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 Anna invests $2,500 at an annual rate of 5%, how much interest will she earn in 9 years?

Back

Anna will earn $1,125 in interest.

Front

How do you convert months to years?

Back

To convert months to years, divide the number of months by 12. For example, 18 months is 18/12 = 1.5 years.

Front

What does 'P' stand for in the Simple Interest formula?

Back

'P' stands for Principal, which is the initial amount of money invested or borrowed.

Front

What does 'r' represent in the Simple Interest formula?

Back

'r' represents the rate of interest, expressed as a decimal or percentage.

Front

What does 't' represent in the Simple Interest formula?

Back

't' represents the time the money is invested or borrowed, measured in years.

Front

If Emilio borrows $1200 at an 8% interest rate for 2 years, how much total will he pay back?

Back

Emilio will pay back a total of $1392.

Front

What is the total amount paid back if the principal is $1200, the rate is 8%, and the time is 2 years?

Back

Total Amount = Principal + Interest = $1200 + ($1200 * 0.08 * 2) = $1392.

Front

What is the interest earned on a principal of $2500 at a rate of 5% over 9 years?

Back

The interest earned is $1,125.