Annual Simple & Compound Interest

Front

What is Simple Interest?

Back

Simple Interest is calculated using the formula: 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.

Front

How do you calculate the total amount with Simple Interest?

Back

Total Amount = Principal + Interest. Using the formula: A = P + (P * r * t).

Front

What is Compound Interest?

Back

Compound Interest is calculated on the initial principal and also on the accumulated interest from previous periods. The formula is A = P (1 + r/n)^(nt), where A is the amount, P is the principal, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years.

Front

What is the difference between Simple Interest and Compound Interest?

Back

Simple Interest is calculated only on the principal amount, while Compound Interest is calculated on the principal plus any interest that has already been added.

Front

If John deposits $2,000 at a simple interest rate of 3¼% for 7 months, how much will he have?

Back

$2,037.92.

Front

How much total will Sarah repay for a loan of $18,000 at 7% simple interest for 4 years?

Back

$23,040.

Front

If Ryan and Tom both invest $3,500 for 6 years, and Tom earns more, how much more does he have?

Back

Tom will have $83.77 more than Ryan.

Front

What is the formula for calculating Simple Interest?

Back

I = P * r * t.

Front

What is the total amount in a savings account after 3 years with a $1,500 deposit at 7% compound interest?

Back

$1,837.56.

Front

How much interest will Sarah pay on her $18,000 car loan at 7% simple interest over 4 years?

Back

$5,040.