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: Interest = Principal × Rate × Time.

Tags

CCSS.7.RP.A.3

Front

What is the formula for calculating simple interest?

Back

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

Tags

CCSS.7.RP.A.3

Front

If you invest $500 at a 5% interest rate for 2 years, how much interest will you earn?

Back

$50. (Interest = 500 × 0.05 × 2 = $50)

Tags

CCSS.7.RP.A.3

Front

Convert 5% to a decimal.

Back

0.05

Front

What is the principal in a simple interest calculation?

Back

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

Tags

CCSS.7.RP.A.3

Front

If you earn $30 in interest from a principal of $600 over 3 years, what is the interest rate?

Back

The interest rate is 1.67%. (Rate = Interest / (Principal × Time) = 30 / (600 × 3) = 0.0167 or 1.67%)

Tags

CCSS.7.RP.A.3

Front

What does the term 'time' refer to in the context of simple interest?

Back

Time refers to the duration for which the money is invested or borrowed, usually expressed in years.

Tags

CCSS.7.RP.A.3

Front

If the interest earned is $15, the principal is $300, and the time is 1 year, what is the interest rate?

Back

The interest rate is 5%. (Rate = Interest / (Principal × Time) = 15 / (300 × 1) = 0.05 or 5%)

Tags

CCSS.6.EE.B.7

Front

What happens to the interest earned if the time period is doubled, keeping the principal and rate constant?

Back

The interest earned will also double.

Tags

CCSS.8.EE.C.7B

Front

If you have a principal of $2000 and an interest rate of 3% for 4 years, how much total interest will you earn?

Back

$240. (Interest = 2000 × 0.03 × 4 = $240)

Tags

CCSS.7.RP.A.3