Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount only, without compounding.

Front

What is the formula for calculating Simple Interest?

Back

The formula is I = P * r * t, where I is the interest, P is the principal, r is the rate of interest (as a decimal), and t is the time in years.

Front

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

Back

P represents the principal, which is the amount of money borrowed or deposited.

Front

How do you convert a percent to a decimal?

Back

To convert a percent to a decimal, divide the percent by 100.

Front

If you have an interest rate of 12.5%, what is it as a decimal?

Back

0.125

Front

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

Back

r represents the rate of interest, expressed as a decimal.

Front

If you lend $500 at an interest rate of 10% for 3 years, what is the simple interest earned?

Back

The simple interest earned is $150.

Front

What is the time period 't' in the Simple Interest formula?

Back

t is the time in years for which the money is borrowed or invested.

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 you borrowed $200 and paid back $240, what was the simple interest earned?

Back

The simple interest earned was $40.