12/7/23 Pract. 3-6 Simple Interest

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: SI = P * r * t, where SI is the simple interest, P is the principal amount, 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: SI = P * r * t, where SI is the simple interest, P is the principal amount, r is the rate of interest (in decimal), and t is the time (in years).

Front

If Ann puts $300 in a bank account earning 4% interest, how much interest will she earn in 1 year?

Back

$12

Front

How do you convert a percentage to a decimal?

Back

To convert a percentage to a decimal, divide the percentage by 100. For example, 4% becomes 0.04.

Front

If Anna invested $2,500 at an annual rate of 5%, how long will it take until she earns $1,125 in interest?

Back

9 years

Front

What is the principal amount in a simple interest problem?

Back

The principal amount is the initial sum of money that is invested or borrowed before interest is applied.

Front

Emilio borrows $1200 from a bank with 8% simple interest per year. How much will he have to pay back total in 2 years?

Back

$1392

Front

What is the total amount to be paid back in a simple interest loan?

Back

The total amount to be paid back is the sum of the principal and the interest earned. It can be calculated using the formula: Total Amount = P + SI.

Front

What is the interest owed on a credit card balance of $1,583 at an interest rate of 8.8% after 3 years?

Back

$417.91

Front

How do you calculate the total amount after interest is applied?

Back

To calculate the total amount after interest is applied, use the formula: Total Amount = Principal + (Principal * Rate * Time).