Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount only, without compounding. It is given by the formula I = PRT, 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 = PRT.

Front

If the principal is $10,000, the rate is 7%, and the time is 20 years, what is the interest?

Back

The interest is $14,000.

Front

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

Back

Total Amount = Principal + Interest.

Front

If Emilio borrows $1,200 at 8% interest for 2 years, how much will he pay back in total?

Back

He will pay back $1,392.

Front

What is the principal in a Simple Interest calculation?

Back

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

Front

What does the rate in Simple Interest represent?

Back

The rate represents the percentage of interest charged or earned per year.

Front

If Anna invests $2,500 at 5% interest, how long will it take to earn $1,125 in interest?

Back

It will take 9 years.

Front

How much interest will Ann earn in 1 year if she puts $300 in a bank account earning 4% interest?

Back

She will earn $12.

Front

What is the relationship between time and interest in Simple Interest?

Back

The interest earned increases with time, as it is directly proportional to the time period.