Simple Interest

Front

What does the variable 't' represent in the simple interest formula I = Prt?

Back

Time, in years.

Front

Before using the rate in the simple interest formula, you must convert it to a ______.

Back

decimal.

Front

What is the formula to calculate the balance (or final amount)?

Back

Balance = Principal + Interest.

Front

Principal and Interest are always ___________.

Back

money.

Front

What does 'P' represent in the simple interest formula I = Prt?

Back

The amount of money borrowed or deposited.

Front

What is the formula for calculating simple interest?

Back

I = Prt.

Front

If you have a principal of $1000, a rate of 5%, and a time of 3 years, what is the simple interest?

Back

I = 1000 * 0.05 * 3 = $150.

Front

How do you convert a percentage to a decimal?

Back

Divide the percentage by 100.

Front

What is the relationship between interest, principal, and time in the simple interest formula?

Back

Interest is directly proportional to both principal and time.

Front

If the simple interest earned is $200 and the principal is $1000, what is the rate if the time is 2 years?

Back

Rate = I / (P * t) = 200 / (1000 * 2) = 0.1 or 10%.