Simple Interest

Front

What is Simple Interest?

Back

Simple Interest is a method of calculating the interest charge on a loan or financial product. It is calculated using the formula: Interest = Principal x Rate x Time.

Front

What is the formula for calculating Simple Interest?

Back

The formula for Simple Interest is: I = P x r x t, where I is the interest, P is the principal amount, r is the rate of interest per year, and t is the time in years.

Front

If Abby wants to double her deposit of $600 at a 5% simple interest rate, how long will it take?

Back

It will take 20 years to double her deposit.

Front

How do you calculate the total amount paid back on a loan with Simple Interest?

Back

Total Amount = Principal + Interest. First, calculate the interest using I = P x r x t, then add it to the principal.

Front

What is the interest paid on a loan of $2,190 at a 2.5% interest rate over 3 years?

Back

The interest paid will be $164.25.

Front

How do you find the interest rate if you know the interest paid, principal, and time?

Back

You can rearrange the Simple Interest formula: r = I / (P x t).

Front

What is the total amount paid after borrowing $8,950 at a 6.85% interest rate for 6 years?

Back

The total amount paid will be $12,628.45.

Front

If Colton borrowed $17,240 at an 8.25% interest rate for 5 years, what will be the total amount paid?

Back

The total amount paid will be $24,351.50.

Front

What is the relationship between time and interest in Simple Interest?

Back

The longer the time period, the more interest will accumulate, assuming the principal and rate remain constant.

Front

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

Back

Principal is the initial amount of money borrowed or invested before interest.