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: Simple Interest = Principal × Rate × Time.

Front

How do you convert time from months to years for calculating Simple Interest?

Back

To convert time from months to years, divide the number of months by 12.

Front

What is the formula for calculating Simple Interest?

Back

The formula for calculating Simple Interest is: SI = P × R × T, where SI is Simple Interest, P is Principal, R is Rate (in decimal), and T is Time (in years).

Front

If you invest $1000 at a 5% interest rate for 3 years, what is the Simple Interest earned?

Back

The Simple Interest earned is $150.

Front

What is the principal in a Simple Interest calculation?

Back

The principal is the initial amount of money that is invested or loaned.

Front

How do you express the interest rate as a decimal?

Back

To express the interest rate as a decimal, divide the percentage by 100. For example, 5% becomes 0.05.

Front

If you have a principal of $2000, an interest rate of 6%, and a time period of 4 years, what is the Simple Interest?

Back

The Simple Interest is $480.

Front

What is the total amount after earning Simple Interest?

Back

The total amount after earning Simple Interest can be calculated as: Total Amount = Principal + Simple Interest.

Front

If you earn $30 in Simple Interest on a principal of $600 over 2 years, what is the interest rate?

Back

The interest rate is 2.5%.

Front

What happens to Simple Interest if the time period is doubled?

Back

If the time period is doubled, the Simple Interest earned will also double, assuming the principal and interest rate remain the same.