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 = 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.

Front

If the principal is $1,000, the rate is 5%, and the time is 3 years, what is the interest?

Back

I = PRT = 1000 * 0.05 * 3 = $150.

Front

What does 'P' represent in the formula I = PRT?

Back

'P' represents the principal, which is the initial amount of money borrowed or invested.

Front

Convert 0.25 to a percent.

Back

0.25 as a percent is 25%.

Front

Convert 12% to a decimal.

Back

12% as a decimal is 0.12.

Front

If Anna invests $2,500 at an annual rate of 5%, how much interest will she earn in 4 years?

Back

I = PRT = 2500 * 0.05 * 4 = $500.

Front

What is the principal if the interest earned is $200, the rate is 4%, and the time is 5 years?

Back

P = I / (RT) = 200 / (0.04 * 5) = $1,000.

Front

If the interest earned is $300, the principal is $1,500, what is the rate?

Back

R = I / (PT) = 300 / (1500 * 1) = 0.20 or 20%.

Front

What is the time if the principal is $2,000, the rate is 6%, and the interest earned is $240?

Back

T = I / (PR) = 240 / (2000 * 0.06) = 2 years.