Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is a method of calculating the interest charge on a loan or financial product. 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 Simple Interest is: I = P × r × t, where I is the interest, P is the principal amount, r is the rate of interest per year, and t is the time in years.

Tags

CCSS.7.RP.A.3

Front

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

Back

Interest = 1000 × 0.05 × 3 = $150.

Tags

CCSS.7.RP.A.3

Front

What is the total amount to be paid back if you borrow $2,000 at a simple interest rate of 4% for 2 years?

Back

Total Amount = Principal + Interest = 2000 + (2000 × 0.04 × 2) = $2,160.

Tags

CCSS.7.RP.A.3

Front

How do you find the total amount paid back on a loan?

Back

Total Amount = Principal + Interest.

Front

What does the term 'Principal' mean in the context of loans?

Back

Principal is the original sum of money borrowed or invested, excluding any interest or profits.

Tags

CCSS.7.RP.A.3

Front

What does 'Rate' refer to in the Simple Interest formula?

Back

Rate refers to the percentage of interest charged on the principal amount, usually expressed as an annual rate.

Tags

CCSS.7.RP.A.3

Front

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

Back

Time represents the duration for which the money is borrowed or invested, typically measured in years.

Tags

CCSS.6.EE.B.7

Front

If a loan has a simple interest of $300 after 2 years, what is the interest rate if the principal was $1,500?

Back

Rate = Interest / (Principal × Time) = 300 / (1500 × 2) = 0.1 or 10%.

Tags

CCSS.7.RP.A.3

Front

What is the total amount paid back on a loan of $5,000 at a simple interest rate of 6% for 4 years?

Back

Total Amount = 5000 + (5000 × 0.06 × 4) = $6,200.

Tags

CCSS.7.RP.A.3