Simple Interest CFU

Front

What is the formula for simple interest?

Back

I = Prt

Front

What does the 'P' in I = Prt represent?

Back

Principal

Front

What does the 'r' in I = Prt represent?

Back

Rate of interest (as a decimal)

Front

What does the 't' in I = Prt represent?

Back

Time (in years)

Front

How do you convert a percentage to a decimal?

Back

Divide by 100 (e.g., 4.3% = 0.043)

Front

If you invest $100 at a rate of 5% for 3 years, what is the simple interest earned?

Back

I = Prt = 100 * 0.05 * 3 = $15

Front

What is the total amount (A) after earning simple interest?

Back

A = P + I

Front

If the simple interest earned is $20 and the principal is $200, what is the rate of interest?

Back

r = I/(Pt) = 20/(200*1) = 0.1 or 10% (for 1 year)

Front

What is the difference between simple interest and compound interest?

Back

Simple interest is calculated only on the principal, while compound interest is calculated on the principal plus any interest earned.

Front

What is the simple interest on a loan of $500 at a rate of 4% for 2 years?

Back

I = Prt = 500 * 0.04 * 2 = $40