Simple Interest

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What is Simple Interest?

Back

Simple Interest is the interest calculated on the principal amount only, without compounding. It is calculated using the formula I = PRT, where I is the interest, P is the principal, R is the rate of interest per year, and T is the time in years.

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CCSS.7.RP.A.3

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What is the formula for calculating Simple Interest?

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The formula for calculating Simple Interest is I = PRT.

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CCSS.7.RP.A.3

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If the principal is $1000, the rate is 6%, and the time is 2 years, what is the interest?

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$120

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CCSS.7.RP.A.3

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Jerry borrowed $4,000 for 5 years at a 6% simple interest rate. How much interest will he pay?

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$1,200

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CCSS.7.RP.A.3

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

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$1392

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CCSS.7.RP.A.3

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What is the total amount to be paid back if the principal is $10000, the rate is 7%, and the time is 20 years?

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$14000

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CCSS.HSF.BF.A.2

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

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9 years

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CCSS.8.EE.C.7B

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What does 'Principal' mean in the context of Simple Interest?

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Principal is the initial amount of money that is borrowed or invested, before any interest is added.

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CCSS.7.RP.A.3

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What does 'Rate' refer to in the Simple Interest formula?

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Rate refers to the percentage of the principal that is paid as interest over a specific period, usually expressed annually.

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CCSS.7.RP.A.3

Front

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

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Time represents the duration for which the money is borrowed or invested, typically measured in years.

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CCSS.6.EE.B.7